UPDATE: Wedbush Reiterates Outperform Rating, Lowers PT on Autodesk Following Disappointing 1Q Results

In a report published Friday, Wedbush analyst Steve Koenig reiterated an Outperform rating on Autodesk ADSK, but lowered the price target from $45.00 to $43.00. In the report, Koenig noted, “ADSK's 1Q results were disappointing. Revenue of $570M (-3% Y/Y) was $13M shy of consensus, and EPS of $0.42 was $0.03 light. Results were weak across all major geographies, and strength in architecture/ engineering/construction (+4% Y/Y) and suites (+8% Y/Y) wasn't sufficient to make up for weakness in the manufacturing vertical and point products. We think global macroeconomic weakness was the primary culprit. Management's commentary that linearity worsened in April is consistent with deterioration in PMI readings. Despite the weak macro, we were surprised by the results and the $70M implied reduction in revenue guidance. We think subpar execution also played a role, perhaps a lingering effect of ADSK's reliance on promotions to move product, coupled with an increase to upgrade pricing at the start of 1Q. In our checks, we were surprised to hear that ADSK ran another ‘Get Current' promotion this quarter; we can't help but think this tactic is getting stale, especially after the push to upgrade customers in 4Q, prior to the price increase.” Autodesk closed on Thursday at $39.78.
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