Autodesk raised at Piper Sandler as efficiency narrative 'could take shape' in '25

Investing.com -- Piper Sandler upgraded Autodesk (NASDAQ:ADSK ) to Overweight, raising the price target to $357 from $311 in a note Wednesday, citing a compelling efficiency narrative that could materialize in 2025. 

The upgrade follows a pullback after the company’s F3Q results, creating what Piper Sandler views as an attractive entry point for investors.

The analysts believe that Autodesk is set to shift focus from revenue growth driven by a cyclical recovery to margin-specific initiatives. 

"Entering 2025, we see a cleaner path for outperformance in shares, less reliant on better revenue growth via cyclical recovery and instead ADSK-specific margin initiatives," they stated.

Piper Sandler projects low-double-digit revenue growth for Autodesk, coupled with mid-teens EBIT growth. This will be driven by "slower, high-single-digit OpEx growth," positioning the company for significant margin expansion.

Autodesk’s free cash flow (FCF) is expected to increase by over 40% in 2025, rebounding from a multi-year billings transition. 

The analysts highlight the potential for the company to generate approximately $14 billion in cumulative FCF through 2029. They state that the strong cash flow could enable Autodesk to deploy cash “more aggressively to capital return policies alongside margin initiatives."

The upgrade is also said to reflect optimism about Autodesk's strategic positioning, with the post-F3Q pullback presenting an opportunity for investors. Piper Sandler notes that the stock previously felt "a little crowded on the long-side," but now offers a clearer path to outperformance.

 

Source: Investing.com