FactSet Research Systems (FDS) PT Lowered to $282 at Goldman Sachs
Goldman Sachs analyst George K. Tong lowered the price target on FactSet Research Systems (NYSE: FDS) to $282.00 (from $412.00) while maintaining a Sell rating.
The analyst comments "FactSet reported soft F4Q results, with organic revenue growth, operating margins and EPS underperforming our estimates and consensus, and newly introduced guidance for F2026 coming below the Street on the top-line and bottom-line. FDS is seeing longer sales cycles and more rigorous client approval processes, causing management to expect revenue growth to decelerate from 5.4% in F2025 to 4.9% in F2026 and organic ASV growth to decelerate from 5.7% in F2025 to 5.2% in F2026. Importantly, we believe competition from Gen AI native companies could potentially cause an erosion of pricing power and market share at FDS, while AI efficiencies on the buy-side could lower headcount and volume demand. The company is guiding to operating margin contraction from 36.3% in F2025 to 34.8% in F2026, as well, due to rising technology and content costs, and increasing investments. FDS' F4Q results and F2026 outlook reinforce our view that it is difficult for the company to deliver healthy organic revenue and ASV growth above mid-single-digits and operating margin expansion simultaneously, given a highly competitive market, required investments to stay relevant and a lack of pricing power. In our view, FDS' soft operating outlook does not represent a negative read-through to SPGI, MCO or MSCI, which have stronger moats. We reiterate our Sell rating on FDS and lower our 12-month price target from $412 to $282."