The investment firm Jefferies & Co. downgraded its recommendation on shares of Intuit Inc. on Monday to "hold," from "buy," saying the company could face pricing pressure as it offers more products online.
Ross MacMillan, an analyst at Jefferies, said the Mountain View, Calif., vendor's TurboTax software would face another weak year in 2010 because of unemployment. "INTU is losing pricing power in consumer tax as the market moves online where competition is stronger," he wrote in a note to clients Monday.
The outlook is stronger for Intuit's payments operations, including online banking, as well as its QuickBooks software and payroll services where, MacMillan wrote, he expects a "growth trough in the July quarter" before a gradual pickup next year. "We also believe the FI business continues to perform relatively well, despite the end customer market," he said.