FactSet Soars on Upgrade

Home Depot (HD) opened lower despite its good earnings. The big surprise today is FactSet Research Systems (FDS) which is up over 9% on an analyst upgrade.

Shares in FactSet Research, which provides financial information to investment professionals, rose sharply Tuesday, touching a fresh 52-week high, after Piper Jaffray upgraded the stock citing expected strong demand from investment banks.
Analyst Brett Manderfeld raised his rating to “Outperform” from “Market Perform” and boosted the target stock price to $50 from $44.
“We have increased conviction that FactSet can maintain double-digit internal growth for the next two years at least,” as investment banks increase hiring, the analyst wrote in a note to investors Tuesday.
Manderfeld said FactSet’s investment management products, which help track portfolio composition and performance, are set to deliver higher revenue because new products such as Portfolio Analytics and Marquis “continue to gain traction.”
The analyst also expects the company’s international operations to help bolster revenue. That division accounts for 30 percent of total revenue and is projected to grow 20 percent per year “for the foreseeable future,” Manderfeld said, adding that “the relative immaturity of this market and FactSet’s strong suite of comparable product offerings abroad” will drive the gains.

Posted by on May 16th, 2006 at 11:58 am


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