Intuit cut to Hold at Truist on softening growth outlook; shares dip

Investing.com -- Truist Securities downgraded Intuit to Hold from Buy on Monday and lowered its price target to $350 from $410, flagging a softening growth outlook and a lack of near-term catalysts for the stock.

Shares in the software firm fell 3.5% in premarket trading by 09:09 ET (13:09 GMT).

Analyst Arvind Ramnani said recent management commentary suggests Intuit’s growth rate could reflect a "J-curve" over the coming year, with near-term trade-offs in the company’s do-it-yourself tax business, flattish growth at Mailchimp, and low-single-digit declines in its desktop small-business software segment.

Growth headwinds that emerged in the fiscal third quarter appear likely to persist, Ramnani warned. Intuit lowered its fiscal 2026 TurboTax growth guidance to 7% year-over-year from 8% last quarter, pointing to weakness among price-sensitive DIY tax filers earning under $50,000 annually and an unexpected 30-basis-point compression among IRS filers, versus an original expectation of a 1% increase.

The analyst said revenue growth among price-sensitive filers could soften further as Intuit shifts from a complexity-based pricing model to a value-based one, potentially requiring more aggressive pricing to acquire customers ahead of monetizing them through add-on services.

Truist trimmed its fiscal fourth-quarter 2026 revenue estimate to $4.25 billion from $4.27 billion and lowered its fiscal 2027 revenue forecast to $23.74 billion from $23.85 billion, both slightly below consensus. At the same time, the firm raised its fiscal 2027 non-GAAP EPS estimate to $27.34, up 15% year-over-year, from $26.58 previously, noting management’s continued commitment to mid-teens EPS growth and capital returns to shareholders following a 17% reduction in force last quarter.

Despite the downgrade, Ramnani said he continues to view Intuit as "a mission-critical platform for businesses, with trust advantages over earlier-stage competitors." He pointed to Intuit’s "Three Big Bets" — assisted tax, its money portfolio, and mid-market offerings — each growing more than 30%, as key growth engines going forward.

The analyst also said Intuit remains well positioned to capture AI-related traffic through partnerships with OpenAI and Anthropic, arguing that DIY filers are still more likely to file through Intuit’s trusted platform than on their own with AI assistance.

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