William Blair upgrades FactSet stock rating on AI opportunity

Investing.com reports that William Blair has raised its rating on FactSet Research Systems (NYSE:FDS) from Market Perform to Outperform. The financial data provider, valued at $10.74 billion, has generated a robust 34.85% return over the past six months, currently trading at $301.96. The upgrade is based on five key factors, with the firm asserting that AI disruption concerns are overstated for FactSet.

The analyst firm anticipates that the company will likely be an early adopter of AI benefits within the sector. William Blair highlights FactSet's recent top-line and adjusted subscriber growth, which they expect to continue. The firm also sees near-term margin improvement on the horizon. The analyst contends that the AI discussion has generated a compelling entry point from a valuation standpoint, describing FactSet as undervalued at present.

InvestingPro analysis confirms the company's solid financial health, with a 6.62% revenue growth rate and a 27-year streak of dividend increases. Further details, including Fair Value estimates and ProTips, are available through InvestingPro. Recently, FactSet reported earnings that surpassed expectations, leading Jefferies to raise its price target to $253 with a Hold rating.

The company expressed confidence in its bookings trends and aims to meet the upper end of its full-year guidance for annual subscriber value and adjusted earnings per share. Other firms have also adjusted their outlooks, with BMO Capital increasing its price target to $275 and UBS maintaining a Buy rating with a $340 target. Stifel, however, retains a Hold rating with a $254 target, emphasizing the company's rapid innovation pace in response to AI-driven market shifts.

These updates underline FactSet's ongoing commitment to adapting and innovating within a dynamic market environment. This report is AI-assisted and reviewed by an editor.