On Friday, BMO Capital Markets adjusted its price target for Autodesk (NASDAQ:ADSK), a leader in 3D design, engineering, and entertainment software. The new price target is set at $293, up from the previous $232, while the firm maintains a Market Perform rating on the stock.
This adjustment follows Autodesk's announcement of a solid fourth fiscal quarter for 2024 and a better-than-expected revenue forecast for fiscal year 2025.
Autodesk's financial performance in the recent quarter and their projections for the coming fiscal year have been a point of focus. The company provided a forecast that aligns with expectations for free cash flow in fiscal year 2026.
Despite a complex economic environment, Autodesk's updated strategy indicates approximately 10% underlying growth, suggesting potential for modest gains.
BMO Capital noted that while there are several variables in Autodesk's fiscal year 2025 plan, the clearer picture of billing transitions and upcoming changes to the business model are deemed to enhance the stock's valuation multiple. Although there has been a slight reduction in earnings per share (EPS) and free cash flow (FCF) estimates, the heightened target price reflects a positive outlook.
Autodesk's forward-looking guidance, which includes an in-line free cash flow indication for fiscal year 2026, has been instrumental in the revised valuation. The company's strategic updates are anticipated to provide a stable pathway for growth even amidst uncertain economic conditions.
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