Jefferies Assumes Infosys Technologies (INFY) at Buy
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Jefferies assumes coverage on Infosys Technologies (NYSE: INFY) with a Buy rating and a price target of $60.00 (from $66.00).
Analyst Atul Goyal notes, "Infosys’ consulting focus approach is evident from the fact that it contributes to a third of its revenues with 44% of revenues from ADM and testing. The company also remains amongst the most leveraged to the US economy, deriving 60% of its revenues from the region with 25% from Europe. On its main business differentiator, he adds, "Infosys is recognized as one of the best delivery organizations, and it commands a 10-15% pricing premium over peers. Its exposure to consulting also makes it the most leveraged to a pickup in discretionary spending."
Commenting on key drivers for the stock price, the analyst highlights: "Infosys is at a stage where most financial metrics are at their worst. Growth has been volatile; margins have fallen 450bps (in the last 13 quarters) despite a currency tailwind. We believe that given the recent reset of expectations for next year, an improvement in either growth or margins would be perceived a positive. Turnaround hopes are hinged on Chairman Murthy."
Shares of Infosys Technologies closed at $52.55 yesterday.
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