Wall Street downgrades Intuit after earnings as reset signals broader challenges

Investing.com -- Wall Street banks downgraded Intuit shares to Neutral on Wednesday, flagging a weaker growth outlook and signs that competitive pressures are spreading beyond the company’s TurboTax tax-filing business.

Intuit forecast fiscal 2027 revenue of $23.28 billion to $23.51 billion, implying 9%-10% growth, down from 14% in 2026 and below analysts’ estimate of $23.72 billion, according to LSEG data. The company attributed the slowdown to weaker Mailchimp sales, continued desktop product declines, and lower average revenue per TurboTax customer following changes aimed at attracting more users.

Fourth-quarter revenue, however, rose 13.6% to $4.35 billion, beating estimates of $4.27 billion. Still, the company’s shares fell sharply in premarket trading Wednesday on guidance miss.

Following the report, JPMorgan lowered its rating on Intuit to Neutral from Overweight, slashing its December 2027 price target to $331 from $605. Analyst Samik Chatterjee said disruption risks have expanded to the QuickBooks-focused Global Business Solutions segment, not just TurboTax.

The team pointed to slowing new customer additions across both QuickBooks and TurboTax DIY. Management guided to less-than-double-digit revenue growth of 9%-10% for fiscal 2027 and declined to commit to a timeline for returning to double-digit growth.

In turn, JPMorgan lowered its three-year revenue growth outlook for Intuit to high-single digits, though the analysts noted that room remains for operating margin expansion. Chatterjee said Intuit’s ability to balance new customer pipeline growth with monetization will be a watchpoint for investors over the next 12 months.

The bank’s 10x EV/uFCF price target leaves room for a re-rating if management restores double-digit top-line growth, though Chatterjee said the stock’s valuation multiple is likely to stay pressured until investors gain more confidence in execution.

Separately, Bank of America also cut Intuit to Neutral from Buy, reducing its price objective to $360 from $400. "Intuit’s weak FY27 guidance reflects trends that appear to be contrary to investors expectations," analysts led by Tal Liani said in a note, noting that results suggest TurboTax is losing share to lower-cost AI-based alternatives rather than benefiting from higher-value assisted offerings.

BofA also flagged enterprise-segment weakness, with online customer count growing just 3% year-over-year.

Intuit guided to TurboTax growth of only 2.2%, versus Street expectations of 6.8% cited by BofA. The analysts also noted Intuit lowered its long-term growth target for Global Business Solutions to 10%-15% from a prior range of 15%-20%.

Both brokers believe fiscal 2027 will be a year of heavier investment for Intuit, as the company pushes lower pricing, promotional offers and distribution expansion to rebuild its new customer pipeline. JPMorgan’s Chatterjee said this could weigh on near-term upside to earnings, while BofA said the effort "could put weight on margins and will take time to generate meaningful growth benefits."

You May Also Be Interested In

• BofA Securities Downgrades Intuit (INTU) to Neutral
• TWG Global denies fraud allegations; Says Dodgers are not for sale
• Intuit (INTU) PT Lowered to $300 at Truist Securities