Intuit Hits Record High After Posting Strong Outlook

(Bloomberg) -- Intuit Inc. shares spiked to a record on Friday, after the maker of tax software reported fourth-quarter results that beat expectations. It also gave an outlook that was seen as strong, especially since it has historically guided conservatively.

Wall Street cheered the results, with at least five firms raising their price targets and expressing confidence about Intuit’s long-term prospects.

Shares rose as much as 7.3%, the stock’s biggest one-day intraday percentage gain since May 2017. The stock has rallied about 60% from a December low and is trading at record levels.

Here’s what analysts are saying about the results:

Guggenheim, Ken Wong

Not only was the outlook better than it expected, it feels “conservative enough (to us) that investors might expect some upside.”

Remains “positive on Intuit’s near- and long-term financial trajectory.”

Buy rating, price target raised to a Street-high-matching $320 from $310.

Jefferies, Brent Thill

The outlook “reflects momentum in both tax and small business segments.”

The company’s long-term prospects look better given the launch of QuickBooks Live, which “could generate significant [positive] surprises.”

Buy rating, price target raised to $320 from $300.

Deutsche Bank, Michael Turrin

Because Intuit’s forecasts tend to be conservative, “this initial outlook was better than expected.” Deutsche Bank sees “a long road ahead towards sustained double-digit organic revenue growth and EPS expansion on the back of a transformative product cycle.”

Buy rating, price target raised to $315 from $290.

Morgan Stanley, Keith Weiss

This was a “solid” quarter, and it looks like Intuit can sustainably grow its online business by more than 30%, thanks to subscriber growth in QuickBooks Online and growing average revenue per subscriber. However, the “durability of Tax growth looks less certain.”

Shares are “near full value” at current levels.

Equal-weight rating, price target raised to $260 from $244.

KeyBanc Capital Markets, Josh Beck

Affirms overweight rating, writing that it is bullish on FinTech, Intuit’s consumer ecosystem, and its international prospects, “where we see substantial growth runway.”

Price target raised by $5 to $305.

William Blair, Matthew Pfau

Notes that QuickBooks Online saw growth in revenue and both U.S. and international subscribers. “These data points show that Intuit’s strategy to drive more small-business growth from non-QBO offerings is progressing well.”

Outperform rating.

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Morwenna Coniam

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