Wall Street Bulls Look Optimistic About Intuit (INTU): Should You Buy?

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Intuit (INTU), and suggests that while the average brokerage recommendation (ABR) indicates a positive outlook, investors should be cautious and validate these recommendations with other tools like Zacks Rank [1][4]. Group 1: Brokerage Recommendations - Intuit has an average brokerage recommendation (ABR) of 1.59, which is between Strong Buy and Buy, based on recommendations from 29 brokerage firms [2]. - Out of the 29 recommendations, 21 are Strong Buy, accounting for 72.4%, while one is Buy, making up 3.5% of the total [2]. Group 2: Limitations of Brokerage Recommendations - Brokerage recommendations may not effectively guide investors towards stocks with the highest potential for price appreciation, as studies indicate a lack of success in this regard [4]. - Analysts from brokerage firms often exhibit a positive bias due to vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [5][9]. Group 3: Zacks Rank as an Alternative - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of near-term stock performance compared to ABR [7][10]. - The Zacks Rank is updated more frequently and reflects current business trends, making it a timely tool for predicting future stock prices [11]. Group 4: Intuit's Earnings Estimates - The Zacks Consensus Estimate for Intuit's current year earnings has increased by 0.7% over the past month to $19.33, indicating growing optimism among analysts [12]. - The recent change in consensus estimates, along with other factors, has resulted in a Zacks Rank 2 (Buy) for Intuit, suggesting a positive investment outlook [13].