Autodesk ‘Not Cheap’ – JPMorgan

Written by Sam Bogda

A JPMorgan analyst has moved shares of Autodesk (NASDAQ 🙂 to Neutral from Not Rated, and has set a target price of $203 per share.

In a wide-ranging note on key industrial software stocks, the analyst said the company recognizes quality but recognizes that macros can play a role in the company’s ability to achieve its goals, which depend heavily on growth.

“When evaluating the stock here, ADSK stands out as the only company that has explicitly directed higher operating margins in the coming years, which is a positive highlight,” the analyst stated when discussing the various stocks.

The analyst explained that the change in the timing of the clusters to a yearly cycle from the previous front loading in Autodesk would be a “pull to FCF in the year the change takes effect (next year)”.

“ADSK isn’t cheap and we like the long-term growth story, but we think the macro is uncertain and street expectations may not reset to FCF, and there’s likely to be a better entry point at some point,” the analyst added.