FactSet Research Systems' (FDS) medium-term financial framework outlined at its Investor Day in New York was largely in line with expectations, with artificial intelligence offering a meaningful growth opportunity, though greater competitive pressure could limit upside, Morgan Stanley said in a report Wednesday.
FactSet targets about 6% revenue growth, 50 basis points of margin expansion and 10% earnings per share growth through fiscal 2029, while also reaffirming fiscal 2027 guidance.
The investment bank said management sees a "generational opportunity" to help clients use AI and noted stronger growth and engagement among customers using FactSet's Model Context Protocol.
FactSet also identified more than $100 million of "gross savings opportunities," with management saying the savings will support margin expansion and fund tokens, compute, content and private markets capabilities, the report said.
Still, AI could increase competition from large language models, new entrants and "incumbents," limiting revenue and margin upside relative to information-services peers, Morgan Stanley said.
Morgan Stanley maintained its equal weight rating on FactSet Research Systems and raised its price target to $321 from $300, saying it would need to see "sustained acceleration" in new AI-related wins to become more constructive.
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