Infosys shares on Friday took a beating, falling as much as 9% to hit an intraday low Rs 1,305 on NSE as a host of brokerages cut their share price targets on the stock following a downward revision of FY24 revenue guidance. The fall was much in line with a steep fall in Infosys American Depositary Receipts (ADRs) overnight
Infosys stock cracked after the IT giant revised downward its FY24 constant currency (CC) revenue guidance to 1-3.5% compared with 4-7% suggested earlier. This is even as its CC growth for Q1 came in line with Street estimates. Infosys cited lower-than-expected volumes and discretionary spending, delays in decision-making and push-outs in anticipated mega deals
Infosys announced its financial results for the first quarter of FY24 on Thursday, reporting a rise of 11% in net profit to Rs 5,945 crore, compared to Rs 5,360 crore in the year-ago period. The IT Major sharply trimmed its FY24 revenue guidance amid an increasingly challenging demand environment
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The number of analysts having a sell recommendation on Infosys stock is now the highest in over a decade. Post its June quarter results, 23.4% of the 47 analysts who track the index have a sell recommendation on the counter. Most analysts who track Infosys stock have either cut their rating or future EPS estimates for the stock
JPMorgan has an underweight rating on Infosys with a price target of Rs 1,150 per share. The cut in guidance brings a welcome dose of realism that should extend to the stock's valuations as well, the brokerage said, adding that persistent sharp cuts and misses in guidance can have a bearing on the stock's valuations in the short-to-medium term. It has reiterated its underweight rating given the weakening growth outlook and demand visibility that Infosys is vulnerable to
"The stock has run up by 19% from its recent lows in April and is currently trading at 22 times one year forward PE, close to its five-year average (22x). We believe the stock can remain under pressure in the near term until clarity emerges on revenue growth revival. We downgrade to Neutral from BUY," said Philip Capital
Macquarie has downgraded Infosys to underperform with a price target of Rs 1,130, which implies a potential downside of 21% from Thursday's closing levels. The brokerage believes that the $2 billion framework deal is not a "mega deal" but just a management estimate and not committed revenue by the client. It also believes that Infosys may not win a fair share of "outcome-oriented" deals and is expected to lag peers
Nomura has downgraded 'Infosys' to reduce and also cut its price target to Rs 1,210 from Rs 1,260 earlier. The brokerage believes that Infosys will underperform industry growth in FY24 and that the cut in revenue growth guidance, overshadows the in-line execution in the June quarter. "The lowering of guidance also reflects the pullback in discretionary demand and slow decision-making," said Nomura
BoFA Securities has cut its FY24 and FY25 Earnings per Share (EPS) estimates for Infosys by 2% and 3% respectively to incorporate the updated full-year outlook. It said that the cut in guidance is an unpacking of macro, portfolio and market share issues. It has maintained its neutral rating on the stock with a price target of Rs 1,390 per share
HSBC is still bullish on the stock, and has maintained its buy recommendation on the stock with a price target of Rs 1,540. While the revised guidance broadly reflects the sectoral weaknesses, there may be some company issues as well, according to the firm. It, however, cut its EPS estimate by 3-5%
Jefferies has maintained a 'buy' rating on Infosys with a price target of Rs 1,550. The firm called Infosys' June quarter results broadly in line with estimates with new deals rising 10% sequentially. Although Jefferies has lowered estimates for Infosys by 2%, it sees limited risk of further earnings cut and expects a CAGR of 10% over FY 2023-2026
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