Millions of Americans are putting the finishing touches on their taxes this week. A Guggenheim analyst said Thursday that within the next few years, many of them may be using TurboTax Live, which could dramatically boost shares of Intuit Inc. INTU.
The Analyst
Guggenheim’s Ken Wong maintained a Buy rating on Intuit and boosted the price target from $260 to $310.
The Thesis
Guggenheim sees TurboTax Live as “transformational technology” that will speed up a shift from using tax preparers to self-preparation with online assistance, Wong said in a Thursday note.
The most optimistic scenario projects TurboTax being a $5-billion business by 2022 and bringing in $7 billion by 2025, the analyst said in Guggenheim’s new series highlighting “transformational ideas.”
“We view TurboTax Live as a disruptive technology and change catalyst that could lift the growth potential of the consumer business from the 9-11-percent target provided at analyst day into the mid-teens,” Wong said. “Our test drive of Live and interaction with TurboTax reps suggest demand is strong, with their expectations for a 50-percent capacity hike next year.”
In addition to boosting its 12-month target price by $50, Guggenheim is also trying to put a value on the long-term potential for changing the way people do their taxes by modeling for a “three-year franchise potential” that pegs Intuit at $380 to $400 a share, the analyst said.
Price Action
Intuit shares were up 0.22 percent at $259.65 at the time of publication Thursday.
Related Links:
The IRS Is Open And Taxpayers Are Filing: What It Means For Intuit
BofA, Guggenheim Positive On Intuit Ahead Of Tax Season
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