Teradata (TDC) PT Lowered to $29 at Barclays

Barclays analyst Raimo Lenschow lowered the price target on Teradata (NYSE: TDC) to $29.00 (from $30.00) while maintaining a Underweight rating.

The analyst comments "We see Q3 results undermining the long-term Teradata investment case. The quarter in itself was fine with most items coming in ahead of muted expectations after TDC meaningfully reset its FY24 guidance last quarter. From that perspective, there should be little change to the overall thinking around shares. However, the company's updated Public Cloud ARR outlook now calls for annual cc growth of 18-22% in FY24 compared to 28-32% expected last quarter and 35-41% expected two quarters ago. The key message around this is that customers are migrating to the cloud in more of a staged process, and reiterated FY24 total ARR guidance demonstrates that customer commitments on an aggregate basis remain stable. There may be truth to this but investors will likely think the magnitude of the growth revisions over the last six months shows limited visibility, and we note cloud migrations are key to the long-term story. Hence, we see the results weighing on shares and maintain our Underweight rating. We lower our price target to $29 (from $30) based on an unchanged multiple and lower FCF estimates."

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