- BMO Capital analyst Daniel Jester maintained Intuit Inc (NASDAQ:INTU) with an Outperform and lowered the price target from $467 to $448.
- Worse-than-expected topline hit from Credit Karma overshadowed otherwise solid metrics in 1Q23.
- Management went to great lengths to highlight the additional conservatism baked into the updated guide and their ability to defend EPS. Still, he doubts investors will consider the numbers fully derisked in the near term with a potential forthcoming recession.
- He likes the shares on a longer-term basis on the strength of the TurboTax and QuickBooks platforms, with the upcoming U.S. tax season as the next major catalyst.
- KeyBanc analyst Josh Beck maintained Intuit with an Overweight and lowered the price target from $450 to $400.
- Intuit reported a somewhat mixed set of results.
- Quickbooks (SBSE) outperformed while Credit Karma came to light, consistent to some degree with his preview when he lowered Credit Karma estimates below the Street.
- Headwinds like personal loan credit tightening, home, auto softness, and the assumption of rising unemployment, thus delinquency rates, contributed to a much lower Credit Karma revenue outlook.
- He reduced his revenue estimates, primarily due to lower Credit Karma estimates. Lowered revenue estimates led to a lower price target.
- He remains Overweight as ~3/4 of the revenue across Quickbooks, and Turbotax generally remains more macro resilient, an untapped opportunity to execute on the embedded finance opportunity and sustained TT share gain opportunity.
- Mizuho analyst Siti Panigrahi reiterated Buy on Intuit and the $650 price target.
- Intuit de-risked Credit Karma by significantly lowering FY23 CK guidance while maintaining the FY23 bottom line, reflecting the resilience and flexibility of its business model.
- With Q1 outperformance, small business growth implies only 14% Y/Y for the remainder of FY23, further derisking that segment.
- Therefore, he expects Intuit to comfortably beat and raise through FY23, supported by defensive revenues primarily from tax and QBO subscriptions.
- With CK and SMB de-risked, strong cash flows, and consistent shareholder returns, he considers Intuit the most defensive software name heading into calendar 2023.
- Price Action: INTU shares traded higher by 4.00% at $394.91 on the last check Wednesday.
- Photo Via Wikimedia Commons
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