INTU Hit By Wave Of Price Target Cuts After ‘Expectation Mismatch’ In Q3 – Stock Plunges Over 19% Post Results

• Barclays analyst Raimo Lenschow lowered Intuit’s price target to $443 from $540 and kept an ‘Overweight’ rating on the stock.
• Even though KeyBanc appreciated the restructuring toward a focused ‘flatter and faster’ organization, the firm identified headwinds in TurboTax Do-it-Yourself (DIY).
•  Wells Fargo stated that Intuit’s third-quarter print ‘left more to be desired’ with lower-than-expected TurboTax results.

Shares of Intuit Inc (INTU) tumbled over 19% on Thursday after the company reported a challenging third quarter and announced significant layoffs, triggering a re-pricing of the stock on Wall Street.

Multiple brokerages, including KeyBanc, Wells Fargo, Barclays, UBS, and Jefferies, cut price targets on Intuit after weaker-than-expected third-quarter results, particularly in TurboTax.

As of the writing, the stock was down by over 19% on Thursday.

INTU’s Multi-Part Transition Underway

Alex Markgraff, analyst at KeyBanc, cut the company’s price target to $450 from $520 and kept an ‘Overweight’ rating on the stock. Markgroff stated that the company’s multi-part transition is underway, according to TheFly.

Even though the analyst appreciated restructuring around a focused ‘flatter and faster’ organization, the firm identified TurboTax Do-it-Yourself (DIY) headwinds and pricing evaluation across the TurboTax/QBO segment.

Intuit said it would lay off about 17% of its global workforce to streamline its operations.

Barclays analyst Raimo Lenschow also lowered Intuit’s price target to $443 from $540 and kept an ‘Overweight’ rating on the stock. The analyst noted that the company reported a tax miss in fiscal Q3 alongside lower payroll growth. 

While tax suffered from lower units and some low-end competition, and payroll faces strong comparisons, the bigger issue, in Barclays' view, is that management struck a very bullish tone going into the results, creating an ‘expectations mismatch’.

INTU’s TurboTax DIY Disappoints Analysts

Meanwhile, Wells Fargo kept an ‘Equal Weight’ rating on the stock and lowered Intuit’s price target to $360 from $425. The firm stated that third-quarter print ‘left more to be desired’ with lower-than-expected TurboTax results and also noted the commentary around low-end impacts, likely to keep Intuit in the ‘can't disprove AI disruption penalty box for now.’

BMO Capital analyst Daniel Jester also reduced Intuit’s price target to $412 from $550 and kept an ‘Outperform’ rating. The firm stated that Intuit’s third-quarter results were challenging, impacted by weaker performance in TurboTax. 

The firm also noted that although Intuit’s higher-end ‘Live’ results were in line with its expectations, the DIY segment missed expectations. This reflected the smaller market size this year and poor performance of TurboTax among price-sensitive consumers, prompting management to suggest that meaningful strategic changes are needed.

What Does Retail Think Of INTU?

On Stocktwits, retail sentiment for the stock has remained ‘extremely bullish’ amid  ‘extremely high’ message volumes over the past 24 hours.

Shares of Intuit have declined over 50% so far this year.

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