Infosys stock gains on analyst upgrade
Shares of Infosys Ltd ADR gained over 1% in early U.S. trading Tuesday after analysts at BofA Securities upgraded the stock, citing a 2025 demand recovery.
While still early for a 2025 outlook, analysts see IT services demand coming together next year, citing:" Normalization of the post-Covid spike in IT spends could be done with by mid CY24, Meeting Basel III requirements is expected to drive up regulatory tech spends by banks, SAP upgrade deadline becoming more of a priority for enterprises amidst the 2027 support deadline and Our take that transformational IT spends could see an uptick post US elections.
"In our view, buyside CY24/FY25 expectations are already down to about 5% revenue growth and flattish EBIT margin, post Accenture’s print," analysts commented."We think that the upcoming earnings / guidance next week could provide the final cut / floor to earnings outlook, given our assessment of 2% tailwind from mega-deals that are already in the bag and low risk of meaningful headwinds to discretionary spends from current levels.
Commenting on Infosys' AI efforts, analysts highlighted that the company is in the early days but will likely be a participant, pointing out a recent collaboration with Handelsblatt group.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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