Credit Suisse Upgrades Mindtree On Earnings Growth Outlook
Credit Suisse upgraded the stock’s rating to ‘Outperform’ and hiked target price to Rs 600.
Credit Suisse upgraded Mindtree Ltd. as it expects the company to report attractive earnings growth, driven by margin expansion.
The growth will also be supported by compound annual growth rate of 23 percent in operating income for two years, according to its research report. It forecasts the information technology company’s operating margins at 15 percent during the financial year ending March 2020.
Recent earnings were impacted due to revenue loss from some top clients and challenges faced by two acquired entities, Bluefin and Magnet. We believe that this is now behind them, leading to attractive EBIT and earnings growth.Credit Suisse Research Report
The brokerage house upgraded the Bengaluru-based software developer’s stock rating to ‘Outperform’ from ‘Neutral’ and hiked target price to Rs 600 from Rs 460 ,implying a potential upside of 17 percent from Friday’s close.
Credit Suisse has rated Mindtree ‘Neutral’ four times, ‘Underperform’ once and ‘Outperform’ three times, according to data compiled by Bloomberg.
Among the analysts tracked by Bloomberg, Mindtree had six ‘Buy’ rating on the stock, 12 had ‘Hold’ recommendation and 14 had ‘Sell’.
Mindtree trades at 19.2 times trailing 12-months earnings per share, according to Bloomberg data. It has returned less than 1 percent so far this year and a gain of 9.6 percent in the past 52-weeks.
