Last Update 26 Feb 26

Fair value Decreased 4.31%

FDS: AI Partnerships And Steady Execution Will Support Future Returns

Analysts have trimmed their average price target on FactSet Research Systems to about $305 from $319, reflecting a more cautious stance as they weigh increased competitive pressure and AI related disruption in the market data industry against relatively steady assumptions for revenue growth, margins and future P/E.

Analyst Commentary

Recent Street research on FactSet highlights a mix of cautious and more balanced views as investors reassess the company’s role in a competitive market data space influenced by AI related uncertainty.

Bullish Takeaways

Bullish analysts pointing to a price target around $321 see room for the shares to reflect execution across Business Services peers, with FactSet grouped among companies that could participate if the sector delivers on revenue, EPS and free cash flow expectations into 2026.
The reference to average 2026 growth figures of 7% for revenue, 12% for EPS and 11% for free cash flow for a broader peer set suggests some investors still view the group, including FactSet, as capable of supporting valuations tied to consistent fundamental progress.
In Line ratings from more neutral voices indicate that, while upside may be capped by competition and AI risk, current valuation levels can be seen as broadly aligned with execution assumptions rather than clearly mispriced.

Bearish Takeaways

Bearish analysts have cut price targets sharply, with reductions to about $210 and $195, signaling concern that prior valuation multiples may not be justified given rising competitive intensity and AI driven disruption in core market data offerings.
Underweight and Underperform ratings focus on the risk that AI magnifies existing pressures on pricing power and client retention, which could make it harder for FactSet to sustain the assumptions embedded in current P/E and cash flow expectations.
The repeated use of cautious ratings, even when broader sector commentary is described as generally constructive, suggests some investors see FactSet as relatively less attractive than other Information and Business Services names on a risk reward basis.
Ongoing price target cuts, including at least one reduction of about $50, reinforce the idea that execution needs to be closely monitored, with any stumble in product competitiveness or client demand potentially putting further pressure on valuation.

What’s in the News

Anthropic introduced 10 new AI plug ins for business customers, developed with partners including FactSet and LSEG, with companies such as Thomson Reuters and RBC Wealth Management using Anthropic powered agents. FactSet shares were trading at about $203.58 after a 7% intraday move (Reuters).
FactSet announced a partnership with Kepler Cheuvreux to bring Kepler Cheuvreux’s Aftermarket Research into the FactSet platform, using FactSet’s AI tools to distribute research that covers more than 1,000 European stocks across 34 sectors.
FactSet launched AI Doc Ingest for Cobalt in beta, a tool that uses AI to extract and structure portfolio company data from a wide range of documents for private capital managers, with a broader North America release targeted for March 2026 and a later rollout in Europe.
FactSet and Arcesium agreed to work together on an integrated investment management offering that connects front, middle, and back office workflows across public, private, and alternative assets, using FactSet’s analytics with Arcesium’s cloud based data and accounting tools.
FactSet reaffirmed fiscal 2026 guidance, with GAAP revenue expected between US$2.423b and US$2.448b, GAAP diluted EPS between US$14.55 and US$15.25, operating income between US$720m and US$750m, and net income between US$550m and US$577m.

Valuation Changes

Fair Value: trimmed from $319.00 to about $305.24, a modest reduction in the modeled upside for the shares.
Discount Rate: adjusted slightly lower from 8.33% to about 8.24%, indicating a small change in the assumed risk profile.
Revenue Growth: kept broadly similar, with the long term annual assumption moving from about 5.31% to roughly 5.34%.
Net Profit Margin: held effectively steady, shifting marginally from about 25.14% to around 25.12%.
Future P/E: reduced from about 19.89x to roughly 18.99x, implying a lower valuation multiple applied to expected earnings.

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Key Takeaways

Integration of acquisitions and new GenAI products is expanding service offerings and supporting revenue and ASV growth.
Enhanced data solutions and operational productivity improvements are poised to sustain margins and bolster future revenue.
Rising technology costs and asset management challenges may pressure FactSet's margins and hinder growth, with uncertain market conditions affecting revenue consistency.

Catalysts

About FactSet Research Systems

Operates as a financial digital platform and enterprise solutions provider for the investment community worldwide.What are the underlying business or industry changes driving this perspective?

FactSet is integrating new acquisitions like Irwin and LiquidityBook, adding immediate cross-sell opportunities and expanding services across buy-side and banking workflows, which will support revenue growth.
The launch of new GenAI products, including Pitch Creator and conversational API, is expected to provide additional services that drive adoption and increase ASV growth, positively impacting future revenue.
The company is implementing strategic initiatives in its wealth management segment, securing partnerships like the UBS deal, and this broad market share in the wealth sector should contribute to sustained ASV growth.
FactSet is increasing its focus on data feeds, benefiting from strong demand for high-quality data solutions, which should bolster future revenue and margin expansion through increased enterprise-level sales.
Focus on operational productivity, such as reducing third-party content costs and enhancing workforce efficiency through automation, underpins the company's confidence in maintaining its operating margins despite recent acquisitions.

FactSet Research Systems Earnings and Revenue Growth

FactSet Research Systems Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming FactSet Research Systems's revenue will grow by 5.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 23.3% today to 27.0% in 3 years time.
Analysts expect earnings to reach $730.7 million (and earnings per share of $20.08) by about September 2028, up from $532.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.6x on those 2028 earnings, up from 26.5x today. This future PE is greater than the current PE for the US Capital Markets industry at 26.7x.
Analysts expect the number of shares outstanding to decline by 0.48% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.33%, as per the Simply Wall St company report.

FactSet Research Systems Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The slowing price increases tied to lower CPI levels could negatively impact FactSet's revenue growth, as demonstrated by a nearly $7 million headwind to ASV growth this quarter.
Persistent challenges in the asset management and banking sectors, including ongoing cost rationalization and budget tightening, pose risks to revenue and retention which could unfavorably affect net margins.
The market environment remains uncertain, particularly for banking, which has been a drag on growth; this uncertainty may continue to suppress revenue growth despite potential wins with new products.
Increased technology expenses, noted as 31% higher mainly due to greater cloud and software costs, could pressure operating margins and require significant cost efficiencies elsewhere to offset.
The execution risks tied to international expansion, given mixed results in regions like EMEA, could lead to inconsistent revenue performance and impact overall growth expectations.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $428.375 for FactSet Research Systems based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $500.0, and the most bearish reporting a price target of just $355.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.7 billion, earnings will come to $730.7 million, and it would be trading on a PE ratio of 27.6x, assuming you use a discount rate of 8.3%.
Given the current share price of $372.86, the analyst price target of $428.38 is 13.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

FDS: Client Retention And AI Integration Will Support Future Outperformance