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Raising Intuit Fair Value Estimate on Growth Opportunities

Intuit maintains its wide moat thanks to subscription transition and connected products.

Mentioned:

Julie Bhusal Sharma: We are raising our fair value estimate for wide-moat Intuit to $277 per share from $199 per share, leaving the stock fairly valued. We’ve raised our fair value estimate for Intuit after considering a lower cost of equity and the company’s potential for further operating leverage as we expect the company to continue to benefit from its transition to a subscription model.

We think Intuit will be able to yield a near 10% five-year compounded annual growth rate in revenues over the next five years, and expand operating margins by 10 points with help from both the accounting and the tax business.

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Julie Bhusal Sharma does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.