BofA Securities has reinstated coverage of FactSet Research Systems Inc. (NYSE: FDS) and assigned the stock an underperform rating with a price target of $195.00, a level that sits near FactSet's recent market price of $199.74. The firm noted both firm-specific growth drivers and headwinds in its analysis.
FactSet supplies financial data, analytics and workflow tools to clients across wealth management, asset management, banking and private markets. The company reported that organic annual subscription value rose 4.9% in the first quarter of fiscal 2026. Over the past year, the stock has fallen sharply, sliding 54%. Despite the share-price weakness, FactSet has extended its dividend for 27 consecutive years, with the current yield at 2.14%.
BofA Securities analyst Wahid Amin said the firm remains constructive on the momentum appearing in FactSet's wealth segment and on the company's early adoption of artificial intelligence capabilities. The bank described FactSet's growth as increasingly driven by expansion as clients deepen their use of the company's data and workflow offerings.
At the same time, BofA flagged several factors that temper the outlook. The firm expects a slower trajectory for annual subscription value and margins, driven in part by elongated sales cycles and muted additions of net new clients. Rising technology and AI-related expenditures were also identified as pressures that could weigh on near-term profitability.
Aside from BofA's action, FactSet has recently been the subject of a number of corporate and analyst developments. At its 2025 Annual Meeting, shareholders approved multiple proposals, including the election of all ten director nominees for one-year terms and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending August 31, 2026.
Analyst views on FactSet differ. BMO Capital and Jefferies reduced their price targets to $305, citing factors that included a lower share count and modest upside to revenue and margins. UBS has maintained a Buy rating with a $425 price target, recognizing FactSet's proprietary data and solutions while noting potential concerns around AI disruptions. Market reaction has also reflected product and technology developments elsewhere in the industry - FactSet shares fell after Anthropic introduced a new AI model aimed at financial research, an event that affected several financial services companies.
Market data referenced by InvestingPro suggests the stock may appear significantly undervalued when compared with a Fair Value assessment. BofA's $195 target and underperform stance, however, reflect the firm's forecast for slower ASV and margin expansion amid sales-cycle elongation and elevated tech spending.
Key points
- BofA reinstated coverage of FactSet with an underperform rating and a $195 price target, near the stock's trading level of $199.74.
- FactSet's organic annual subscription value rose 4.9% in Q1 of fiscal 2026; the company has increased its dividend for 27 consecutive years and yields 2.14%.
- Analysts are divided: BMO Capital and Jefferies cut targets to $305, UBS kept a Buy rating with a $425 target, and market moves followed Anthropic's launch of a new AI model for financial research.
Risks and uncertainties
- Elongated sales cycles and muted net new additions could slow annual subscription value growth - a risk to the financials and data services sectors.
- Elevated technology and AI spending may pressure margins in the near term - affecting profitability across software and financial information providers.
- Competitive product introductions in AI for financial research have coincided with share-price volatility for FactSet and peers - a market risk for financial data and analytics firms.
FactSet's mix of growth in client adoption and near-term cost pressures has produced varied analyst reactions and market outcomes. Investors assessing the stock face a combination of steady recurring revenue characteristics and potential margin headwinds tied to sales dynamics and rising technology investment.