Goldman Sachs’s Heather Bellini this morning downgrades Autodesk (ADSK) shares to Sell from Neutral, cutting her price target to $32 from $38, writing that upside in the sales of the company’s “suite” products of software will be difficult to achieve.
Sales of suites such as “Factory Design” and “Product Design” make up two thirds of the growth in the company’s revenue, Bellini points out, and more than half of that growth in the just-ended fiscal Q3.
Bellini sees risk of a slow-down as the effect of discounting wanes and as global macro-economic worries weigh:
While continued promotions, which have helped with recent Suites sales, could support the top line, our checks suggest that the attractiveness of programs (in terms of the promotions) has declined over the past three quarters. Macro indicators. Autodesk has the highest correlation to GDP and market trends within our coverage group, which combined with a negative bias to our list of 15 benchmarks, suggests FY2013 estimates are not likely to move higher.
Bellini’s estimate for next year is consistent with Street consensus, at $2.44 billion in revenue and $2.06 per share in profit.
However, “The bull thesis is focused on upside to this target [10% revenue growth next year] based on adoption of the company�s Suite offerings.”
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