FactSet Research Systems (FDS) is likely to see a deceleration in organic annual subscription value, or ASV, growth for the year ending 2024, Morgan Stanley said in a note.
The investment firm said it continues to model 6.5% organic ASV growth for the year ending 2024, implying a 60 basis point deceleration from the year ending 2023.
“We remain cautious given the challenging market environment and prefer other names across info services with higher EPS growth trading at lower valuation,” Morgan Stanley said.
FactSet expects continued pressure in fiscal H1 of 2024 due partly to tighter client budgets but forecasts a recovery in fiscal H2 on better client sentiment, some new business wins and a stronger pipeline in wealth, the report said.
“In order to become more constructive, we would like to see evidence of potential ASV inflection before thinking that we have reached the bottom,” Morgan Stanley said.
Morgan Stanley raised its price target on the stock to $352 from $332 while keeping its underweight rating.