Wells Fargo Upgrades Genpact Ltd. (G) to Outperform; BPO Market Improving, "Six Sigma" Brand, Lessened Share Overhang

January 17, 2012 7:44 AM EST
Get Alerts G Hot Sheet
Price: $43.17 +2.20%

Rating Summary:
    13 Buy, 4 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 12 | New: 20
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Wells Fargo upgraded Genpact Ltd. (NYSE: G) from Market Perform to Outperform with a price target range $17-$18.

Wells analyst says, "Our basis: 1) Recent feedback from outsourcing advisors suggest continued improvement in the pace of smaller-sized (less than $25MM TCV) business process outsourcing (BPO) transactions, especially for those service providers that can offer deep knowledge of the client's processes, and offer unique solutions. 2) We expect Genpact's GE six sigma processing excellence legacy to be a big plus as large enterprises continue to adapt to a slow growing global economy. 3) We are increasingly comfortable with G producing mid-teens, or better, organic revenue growth, while maintaining a stable adjusted operating margin given increased re-investment in the business. We see the potential for estimate increases as 2012 progresses. 4) The November sale of the remaining stock held by former parent General Electric (NYSE: GE) has weighed on the shares with the overhang now digested by the market (or soon will be), in our view."

For an analyst ratings summary and ratings history on Genpact Ltd. click here. For more ratings news on Genpact Ltd. click here.

Shares of Genpact Ltd. closed at $14.50 yesterday.


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