Why Intuit Shares Might Keep Rallying
While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Intuit climbed 1.5% today after Bank of America upgraded the accounting software specialist from neutral, to buy.
So what: Along with the upgrade, analyst Kash Rangan raised his price target to $78 (from $69), representing about 16% worth of upside to yesterday's close. While value investors might be turned off by the stock's steady surge since late June, Rangan believes that continued growth at its small-business segment should fuel even further price appreciation.
Now what: BofA likes Intuit's risk/reward trade-off at the current levels. "We are upgrading INTU, as we see a changing in guard with the SMB business growing increasingly important," wrote BofA. "With consumer tax expectations moderating, we believe the opportunity in SMB/Pro Tax will be increasingly apparent." With Intuit shares surging to a new 52-week high today and trading at a 20-plus P/E, I'd wait for some of the enthusiasm to fade before betting too much on those prospects.
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The article Why Intuit Shares Might Keep Rallying originally appeared on Fool.com.
Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Intuit. The Motley Fool owns shares of Intuit. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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