Autodesk Catches a Bid

Beleaguered Autodesk(ADSK Quote - Cramer on ADSK - Stock Picks) investors got some welcome relief Monday, as a favorable note from Citigroup apparently propelled the shares to a gain of more than 6%.

Analyst Brent Thill cited a proprietary survey of 50 Autodesk resellers and said the result "indicate a solid demand environment." He expects revenue in the soon-to-be-reported second quarter to be slightly ahead of First Call's consensus.

Autodesk sells design software used in many industries, including building, and investors, worried over the company's exposure to softening home construction, have knocked the stock down by 25% this year.

But the company's sales are well diversified, said Deutsche Bank analyst Tim Fox, who estimates that the home building industry accounts for less than 10% of Autodesk's sales.

Fox said his channel checks at midquarter showed that resellers are expecting to meet their sales targets, and the pipeline is strong. He is expecting an in-line quarter. Deutsche Bank has, or is seeking, investment banking business with Autodesk.

Thill's survey found that the pricing environment is active, with some increases offset by promotions, but overall "pricing has an upward bias." Citigroup has an investment banking relationship with Autodesk.

In recent trading, shares were up $2.14, or 6.6%, to $34.55. The company will report second-quarter earnings after the close of trading on Aug. 17.