Why Are Autodesk Shares Falling Today?

Why Are Autodesk Shares Falling Today?
  • Analysts slashed the price target on Autodesk Inc ADSK after its investor day, where it only reiterated its FY23 cash flow target.
  • Mizuho analyst Matthew Broome lowered the PT to $350 from $370, implying a 15.4% upside, and reiterated a Buy.
  • Broome reduced the target on updated comps but remains upbeat on its prospects following economic recovery.
  • Stifel analyst Adam Borg lowered the PT to $340 from $370, signifying a 12.1% upside, and maintained a Buy.
  • Autodesk's plans to shift its base business of product subscriptions from multi-year paid up-front to annual payment beginning in FY24 will create a free cash flow headwind, Borg notes. He holds concern whether it will be a long-term move. 
  • He also thinks shares may "trade sideways" in the near term out of the event.
  • Morgan Stanley analyst Keith Weiss affirmed an Equal-Weight and lowered the PT from $334 to $324, indicating a 6.8% upside.
  • Rosenblatt analyst Blair Abernethy maintained a Buy with a $355 PT, implying a 17.1% upside. Abernethy noted a transition to annual billing for subscriptions would likely reduce free cash flow below its $2.4 billion 2023 target before recovering in FY25. 
  • Abernethy remains positive on Autodesk's "growing end-markets and its expanding product offering to address its opportunity."
  • Price Action: ADSK shares traded lower by 4.84% at $288.56 on the last check Thursday.

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