Goldman Sachs Comments On Amdocs Limited Following Analyst Meeting

Following Amdocs Limited's

analyst event, Goldman Sachs is adjusting its model to reflect the new share buyback of $1 bn and modest reductions to its long-term revenue growth forecast. Goldman's annual operating margin expansion forecast, however, remains unchanged at 20 bp per year, finishing at 16.7% in FY13, which compares to DOX's long-term operating margin target of 16%-18%. These changes result in a $0.02 increase to Goldman's FY11E EPS, now at $2.07, and the same for its FY12E EPS, now at $2.32. Goldman Sachs views DOX as exposed to a large but relatively mature end market driven by cyclical demand trends; however, there are significant secular pockets of growth in the explosion of wireless, connected devices, and international expansion. As a result, it believes that DOX is taking the right steps in configuring its model around these long-term drivers, while its more aggressive stance on capital stewardship provides another important driver for EPS growth. Goldman Sachs has a $32 PT and Neutral rating on DOX DOX is trading lower at $28.84