UPDATE: Goldman Sachs Resumes Coverage on Gartner on Very High Growth/Margin Expansion Expectations
In a report published Friday, Goldman Sachs analyst Andre Benjamin resumed coverage on Gartner (NYSE: IT) with a Neutral rating and $60.00 price target.
In the report, Goldman Sachs noted, “We resume coverage of IT with a Neutral rating and a $60, 12-month, EV/EBITDA-based target price for 7% total return, largely in line with the 4% average upside for the group. IT has outperformed for most of the last 5-6 years, including +37%/+4% since Jan 2011/YTD – on sustained above average earnings growth from sales force expansion and success upselling customers. Key positives include (1) top-quartile EBITDA growth; (2) top-quartile returns (driven by low capital requirements) despite bottom-quartile margins (likely from reinvestment in product development and people); and (3) a net cash position and commitment to stock buybacks. We like IT's business due to a solid competitive position, strong returns and growth drivers that are more visible relative to peer high growth information service companies in our view. However, we remain Neutral because we believe very high growth and margin expansion expectations leave IT virtually ‘priced to perfection'.”
Gartner closed on Thursday at $57.81.
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