Stifel has moved to downgrade Intuit, trimming its investment rating to Hold from Buy and cutting the firm's price target to $275 from $375. The brokerage attributed the change to expectations that Intuit will lower its long-term growth outlook for core businesses as it transitions toward more value-based pricing tactics.
Analysts at Stifel indicated they anticipate management will revise down growth targets for both TurboTax and the Global Business Solutions unit when the company reports fourth-quarter results and holds its analyst day in September. The firm said it sees Intuit stepping back from a period of steep price increases in response to market-share erosion and increasing customer sensitivity to pricing.
On the modeling side, Stifel reduced its fiscal 2027 revenue forecast for Intuit to $23.44 billion from a prior $23.64 billion projection. It also lowered its fiscal 2027 earnings-per-share estimate to $26.94 from $27.34, while introducing an initial fiscal 2028 EPS forecast of $29.38.
Specifically, Stifel expects TurboTax's long-term growth target to be reset to a 4%-6% range, down from the current 6%-10% target. The brokerage linked the change to pressure in the do-it-yourself tax-filing market, noting that lower-income customers are becoming more sensitive to price. Stifel added that management's pivot toward extracting value from customers through ancillary services rather than through tax-filing fees could result in near-term revenue headwinds.
For the Global Business Solutions segment, Stifel projected a potential reduction in the long-term growth target to 10%-15% from the existing 15%-20% range. The downgrade reflects concerns about slowing momentum in QuickBooks, payroll services and Mailchimp. Stifel singled out Mailchimp as a particular concern, saying the business has materially underperformed expectations and continues to cede market share to competitors.
Despite these adjustments, Stifel did not predict another sharp sell-off in Intuit's shares. The brokerage pointed to the company's active share repurchase program and relatively modest valuation multiples as factors that could limit downside. Still, Stifel signaled that Intuit's stock is likely to trail other large-cap software peers until revenue growth forecasts are restored to stronger levels.
What to watch next - upcoming fourth-quarter results and the company's analyst day in September, where Stifel expects management to formally lower growth targets for TurboTax and Global Business Solutions.