Bank of America Securities said that despite a good fiscal 3Q, Intuit, maker of tax-preparation software, issued a disappointing FY24 outlook. BofA therefore lowers its price objective to $730 a share from $760. BofA said Intuit’s FY24 consumer tax outlook for 7% to 8% remains unchanged post tax quarter is disappointing, and its consumer tax margin is trending lower than last year at 68% year-to-date, vs 71% a year ago. But Morgan Stanley Research analyst Keith Weiss raises his price target to $750 from $740 a share, saying thatthe Intuit platform continues to drive durable high-teens earnings growth even while investing for future opportunities, a durability that should be reflected in a premium multiple. Shares fall 7.4% to $613.05.

Intuit Inc (NASDAQ:INTU) shares tanked in premarket and morning trading on Friday, even after the company reported strong results for its fiscal third quarter. The results came amid an exciting earnings season. Here are some key analyst takeaways. BofA Securities On Intuit Analyst Brad Sills maintained a Buy rating while cutting the price target from $760 to $730. “With the major tax quarter now behind Intuit, the company issued a disappointing FY24 outlook,” Sills wrote in a note. The company projected 7%-8% consumer tax growth for fiscal 2024, while “we were expecting 9% to 10%,” he added. The lower projection was due to share losses at the “free filers and lower ASP filers,” with the company focusing on market share gains in the “up-market CPA segment with TurboTax full service,” the analyst stated. “We believe a focus on the higher value filing segment makes sense, though net share losses are concerning,” he further wrote.

Intuit-owned Credit Karma has seen some caution from customers on extending credit. CFO Sandeep Aujla says on a call with analysts that the overall picture for the business was mixed because of uncertain macroeconomic trends. He says select partners have been taking a conservative approach to extending their credit in personal loans and credit cards in the recently completed quarter. The unit’s revenue is still expected to come in at the upper end of guidance. Intuit now expects revenue for Credit Karma to rise 2% on the year, compared with its previous guidance of down 3% to up 3%. Intuit shares slide 7.9% to $609.96.

Intuit is losing tax filers on its free software, and management doesn’t seem to mind. The company’s customers paying nothing is expected to be down about 1 million year-on-year. CEO Sasan Goodarzi says on a call with analysts that customers looking to use free tax software tend to bounce between platforms. “We are not interested in those customers,” he says. Intuit, rather, is focused on quality of customers, looking to gain more share in the assisted tax-filing segment. Intuit expects total TurboTax units to fall 1% on the year, but sees average revenue per return increasing approximately 10%. Intuit slides 8.3%.

Intuit’s (INTU) upgraded annual outlook demonstrated the financial technology platform’s durable earnings growth, though unit share losses in consumer tax and a sequential deceleration in online services growth could “stoke concerns” about sales-growth durability, Morgan Stanley said Friday. Late Thursday, the parent of tax-preparation software TurboTax posted stronger-than-expected fiscal third-quarter results. It said at the time that it expected full-year adjusted per-share earnings of $16.79 to $16.84, up from its prior outlook of $16.17 to $16.47. Intuit increased its revenue forecast to between $16.16 billion and $16.20 billion from its previous guidance of $15.89 billion to $16.11 billion. Analysts polled by Capital IQ are looking for normalized EPS $16.70 on revenue of $16.18 billion. The company expects the number of customers “paying nothing” for filing returns to be more than 10 million for the full year, down from more than 11 million last year, according to a statement. “Due to

We trim our target to $705 from $715, on a P/E of 37x our FY 25 (Jul.) EPS estimate, above its 3-year average. We raise our FY 24 forecast to $16.80 from $16.43, and our FY 25 EPS view to $19.05 from $18.86. INTU posted Q3 revenue of $6.74B, above consensus by $100M, while non-GAAP EPS of $9.88 beat by $0.50. Total sales accelerated nearly 12%, from stronger Consumer revenues (+8%, vs 3.1% in Q3 FY 23), Credit Karma growth (+8% Y/Y), and a healthy increase in its Small Business & Self-employed segment (+18.1% Y/Y). Investments to transform its assisted experience with Turbotax Live and AI-powered features are improving retention, and expected to drive share gains in higher-spending customer segments. We like its strategy to focus on quality users to better monetize its services, albeit more impactful to results in FY 25. Efforts to integrate Credit Karma and TurboTax products

Intuit (INTU) has demonstrated “durable earnings growth” by raising its fiscal year targets for each revenue segment and increasing its EPS target by 3%, Morgan Stanley analysts said in a note to clients Friday. “Intuit again flexes the power of its broad platform and strong expense control to deliver consistent EPS growth,” Morgan Stanley said. “The existing franchises continue to yield solid growth for Intuit, while the yields on more recent investments start to come into focus.” Morgan Stanley also said that Intuit’s small business segment is “proving more durable than expected” with sustained 18.1% growth in Q3 compared with 18.3% annual growth in Q2. The firm maintained its overweight rating on Intuit’s stock and raised its price target to $750 a share from $740. Shares of Intuit were down 6% in recent premarket activity.