FactSet raised at UBS on 'underappreciated' sticky franchise

FactSet Research Systems' stock price rose by 4.09% to $300.99 following a rating upgrade from UBS, which described the company's robust business model as undervalued in the current market.

Analysts from UBS highlighted that the negative impact of AI disruption narratives has led to reduced valuation multiples for the information services sector, despite the resilience of FactSet's solutions and its rapid integration of AI capabilities.

UBS upgraded FactSet's stock rating from Neutral to Buy, lowering the price target from $480 to $425 and expecting continued growth in Annual Subscription Value (ASV), while also revising its earnings per share (EPS) estimates downward for 2026 and 2027, but still projecting them to exceed consensus estimates.

While some analysts rate the stock as a Strong Buy, the broader consensus on Wall Street is a Hold, with the Quant Rating system classifying it as a Sell.

Recommendation Rating: Positive Outlook on FactSet Research Systems

FactSet Research Systems (NYSE:FDS) experienced an increase in its stock price following an upgrade from UBS, which highlighted that the company's robust business model is currently undervalued.

On Monday morning, shares rose by 4.09%, trading at $300.99.

In their research note, analysts Alex Kramm and Nassime Bildman expressed, "We believe FDS, along with the information services sector, has been negatively impacted by current AI disruption narratives, leading to reduced valuation multiples."

They continued, "While we acknowledge the significance of potential shifts driven by AI, we feel that the market has not fully recognized the resilience of FDS' solutions in a traditionally stable industry."

Additionally, the analysts noted that FactSet has demonstrated a swift integration of AI capabilities and is successfully implementing various new initiatives. They anticipate ongoing growth in Annual Subscription Value (ASV) and believe that the current stock price reflects only minimal growth expectations, suggesting potential for share price appreciation.

The stock rating was upgraded from Neutral to Buy, although the price target was adjusted downward from $480.00 to $425.00.

Moreover, the investment bank revised its earnings per share (EPS) estimates for FactSet, lowering the 2026 forecast from $18.29 to $17.42, slightly above the consensus of $17.31, and the 2027 estimate from $19.05 to $18.94, also above the consensus of $18.85.

Currently, analysts on Wall Street rate the stock as a Hold, while some authors rank it as a Strong Buy. Meanwhile, the Quant Rating system has assigned a Sell rating to the stock.