UPDATE: Goldman Sachs Reiterates on ExlService After Key Client Terminates Agreement
In a report published Tuesday, Goldman Sachs analyst Paul Thomas reiterated a Neutral rating on ExlService (NASDAQ: EXLS), but lowered the price target from $30.00 to $26.00.
In the report, Goldman Sachs noted, “EXLS filed an 8K on November 1, 2013 disclosing the termination notice received from The Travelers Indemnity Company. Travelers was EXLS' largest customer in 2012, accounting for 10.1% of total revenue. The company does not expect a material impact to CY2013 due to timing of the announcement, however management estimates a $14 - $28 million headwind to 2014 revenues and that the ramp down process could take up to 18 months, affecting 2015. With the loss of one of EXLS' key customers and a challenging 2014 ahead we reduce our 2014/2015 EPS estimates by 4%/6% and lower 12-month target to $26 from $30 or 14.3X (from 15.8X) our CY14 EPS of $1.82.”
ExlService closed on Monday at $29.07.
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