Bentley Systems (BSY) is seen as a tactical defensive play in the near term due to its higher exposure to civil and infrastructure spending, which is more stable and resilient than commercial spend, UBS Securities said in a note as it initiated coverage with a neutral rating and a $48 price target.

The firm noted that the broader uncertainty in the software demand environment could challenge revenue growth, making Bentley's position more defensive at this time.

UBS also highlighted Bentley's "emerging" artificial intelligence opportunity, pricing power, and diverse growth drivers as factors that support its sustainable low-teens annual recurring revenue growth outlook.

However, UBS cautioned that while it sees some positive factors, it has difficulty justifying meaningful upside for the stock, which would require acceleration in revenue and ARR growth. The firm also pointed out that Bentley isn't fully immune to risks from policy changes, and growth catalysts from new AI-related products are still in the early stages.

The company's shares were down 2.4% in recent Monday trading.

Price: 38.75, Change: -0.96, Percent Change: -2.41