Intuit shares jumped at the open on Thursday after Morgan Stanley elevated the stock to its Top Pick list, citing what analyst Keith Weiss called a “durable compounder at a discount.”
In the note, Morgan Stanley revealed it is “making Intuit our Top Pick as valuation screens attractive at 20X GAAP PE,” adding that two major product cycles support “a path to top-line acceleration.”
Weiss argued the upgrade reflects a combination of an attractive entry point, near-term catalysts and long-term growth potential.
He wrote that Intuit’s valuation “looks even more attractive on a growth-adjusted basis,” with the shares trading at a “1.01x CY26 PEG versus large-cap peer averages of 1.21x and the broader market >1.6x.”
The bank also highlighted broad-based strength following Intuit’s F2Q results, including “17% total revenue growth, 18% growth in Global Business Solutions, 21% Online Ecosystem growth, and approximately 40% growth in QBO Advanced and Intuit Enterprise Suite.”
Weiss stated that these results reinforce confidence in the two key product cycles (Assisted Tax and Mid-Market Accounting & Services), which he believes can help move Intuit “back toward a 20% growth algorithm over time.”
The firm stated that momentum in Assisted Tax is notable, with TurboTax growing “12% even with IRS filings tracking five points below prior-year levels” and customer visits exceeding five million by February 6.
source https://www.investing.com/news/stock-market-news/intuit-stock-rises-after-morgan-stanley-top-pick-designation-4571266
