TD Cowen downgrades Intuit on more negative near-term catalyst path

Investing.com -- TD Cowen has downgraded Intuit to Hold from Buy, with the firm’s analyst Jared Levine citing a near-term catalyst path that he sees skewing more negative than positive and limiting a recovery in the shares.

Levine told investors in a note that the firm expects that path to weigh on the stock "until at least its 3Q27 print in May," when Intuit will offer a preliminary view of its fiscal 2027 tax season performance.

TD Cowen pointed to a challenging setup for the upcoming fourth-quarter print, no needle-moving announcements expected at September's investor day, and persistent overhangs from perceived AI risks and competitive intensity.

The firm also warned sentiment could deteriorate first. With the fourth-quarter report due in August, TD Cowen expects Intuit to guide fiscal 2027 revenue below consensus and its long-term target of 10%-plus, and to cut long-term growth targets for its Global Business Solutions and TurboTax units.

TD Cowen does not fully agree with "the existential AI bear case on shares," but sees significant execution risk tied to Intuit's AI product strategy and rising competition for do-it-yourself tax from free solutions, creating uncertainty over the durability of double-digit revenue growth.

The firm cut its price target for the stock to $304 from $504, based on 10 times calendar 2027 earnings, and lowered fiscal 2027 and 2028 revenue estimates to 1.3% and 2.2% below Street, respectively.

TD Cowen flagged sustained fund outflows from the AI trade as the primary risk to its now-neutral view.

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