12:19 PM EDT, 05/30/2024 (MT Newswires) -- FactSet Research Systems ( FDS ) is facing downside risks as its sales are under pressure amid an ongoing malaise in the financial services sector, BofA Securities said Thursday in a note to clients.

The company's annual subscription value and revenue will likely stay stuck in a rut amid an uncertain environment and lackluster capital markets activity, the investment firm said, adding those factors may lead to delays in decisions by clients and slower closing of major deals.

FactSet's organic annual subscription value growth has decreased from high-single digits in fiscal years 2021 through 2023 ending Aug. 31 to mid-single digits, BofA said.

The investment firm said that it's worrying that "softer volumes are leading to more intense competition" and it sees risks to organic annual subscription value exiting fiscal Q4 in the guided range, which is the low end of 5% to 7% growth.

The investment firm downgraded FactSet to underperform from neutral and cut its price target to $407 from $500.

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