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Investing.com - BMO Capital has reduced its price target on Infosys Technologies (NYSE:INFY) to $18.00 from $20.00 while maintaining a Market Perform rating. The IT services giant, currently trading at $16.07 with a market cap of $67.92 billion, appears undervalued according to InvestingPro’s comprehensive analysis.
The firm’s decision follows Infosys’s September quarter results, which BMO described as "reasonable" with a slight increase to the bottom end of the company’s fiscal year 2026 guidance. The company maintains strong financial metrics with a healthy 29.89% gross profit margin and a 4.52% revenue growth rate.
BMO noted that commentary on the demand environment remains subdued, with no improvement in smaller deals compared to the June quarter, leading the firm to keep its second-half FY26 constant currency growth estimates largely unchanged.
While Infosys highlighted positive developments in AI-related demand, BMO expressed skepticism about artificial intelligence being a long-term tailwind for services companies.
Based on these factors, BMO lowered its target price by $2 while maintaining its neutral Market Perform rating on the Indian IT services provider.
In other recent news, Infosys reported a 3% year-over-year growth in revenue for the first quarter on an organic constant currency basis. The company also adjusted its fiscal 2026 revenue guidance, raising the low end to a range of 1-3% from the previous 0-3%. Additionally, Infosys announced a strategic partnership with German energy company RWE to automate digital workplace solutions, aiming to enhance operational efficiency through tools like Azure-powered bots and service request automation. Meanwhile, Stifel raised its price target for Infosys to $18.50, maintaining a Hold rating due to improved guidance. Rothschild Redburn initiated coverage with a Sell rating, setting a $12.00 price target, citing a modest growth outlook despite a favorable business mix. JPMorgan reiterated an Overweight rating, highlighting Infosys’s strong cash reserves and potential for share buybacks. The company held $5.3 billion in net cash and generated $3.9 billion in free cash flow over the last year. In regulatory news, reports emerged that President Donald Trump might introduce a $100,000 fee for H-1B visa applications, which could impact Infosys’s business model.
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