UPDATE: Bank of America Downgrades Infosys to Neutral on 4Q Miss, Lower FY14 Guidance
In a report published Monday, Bank of America analyst Mitali Ghosh downgraded the rating on Infosys Ltd. (NYSE: INFY) from Buy to Neutral, and lowered the price target from $62.50 to $44.80.
In the report, Ghosh noted, “We lower Infosys to Neutral post 4Q miss and a significantly lower than expected FY14 guidance. 4Q EBIT missed our/street estimates by 6/9%. FY14 USD rev growth guidance came in at 6 to 10% vs our/street estimate of 15/17% and while margin & EPS guidance discontinued, commentary suggests significant erosion vs. our/street expectation of a flattish margin outlook. We cut FY14/15e EPS by 12-14%, target PE from 16x to trough levels of 13xFY15e given high earnings and stock volatility and PO to Rs2,350. While Infy has performed inline with Sensex over past 6months even post Friday's correction, it has been a roller coaster with 16% underperformance in Dec quarter & 30% YTD outperformance pre-result.”
Infosys Ltd. closed on Friday at $43.10.
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