Morgan Stanley Sees Intuit Inc. As Building For The Long-Term

In a report published Wednesday, Morgan Stanley analyst Jennifer Swanson Lowe reiterated an Underweight rating and $72.00 price target on Intuit Inc. (NASDAQ: INTU).In the report, Morgan Stanley noted, “Last year's analyst day highlighted operational realignments designed around two core user groups; consumers and small businesses. This year, INTU provided an update on these efforts, and reaffirmed its commitment to executing against the current strategy. The Small Business segment continues to benefit from growing adoption of QBO, while increased efforts in Consumer Tax have re-accelerated unit growth although ASP improvements are yet to come. We see INTU as a high single-digit revenue grower with room for margin expansion and share repurchases, driving sustainable EPS of 12-15%. However, we also see this as fully priced in with the stock already at 17.5x target post-transition FY17 EPS of ~$5, while we believe the threat of competition in SMB and market saturation in consumer tax is increasing and presents downside risk.”Intuit Inc. closed on Tuesday at $87.65.