11:03 AM EDT, 08/14/2024 (MT Newswires) -- Intuit's (INTU) focus on increasing revenue per customer through higher pricing led to margin expansion and earnings per share growth, but the aggressive pricing actions may now be leading to market share losses and increased risks, potentially affecting the durability of the company's growth, Morgan Stanley said in a note Wednesday.

"Now along with the increased volatility from recently acquired [Credit Karma] and Mailchimp, we fear pushing too hard on price may be contributing to share losses at TurboTax and introduces risk at QuickBooks," Morgan Stanley said.

As TurboTax transitions from the do-it-yourself, or DIY, to the assisted category, the business is expected to see near-term risks such as further market share losses due to significant price increases, DIY market saturation and assisted business' strong growth not being enough to offset DIY market share losses and saturation, Morgan Stanley said.

Meanwhile, substantial price increases have raised expectations for Quickbooks' growth and there is more pressure on the online version as the desktop platform is declining, according to the note.

Morgan Stanley downgraded its rating on Intuit's stock to equalweight from overweight and reduced the price target to $685 from $750.

Shares of Intuit fell 2.2% in recent trading.

Price: 631.47, Change: -14.37, Percent Change: -2.22