Caesars Entertainment misses Q2 earnings expectations, shares edge lower
On Tuesday, TD Cowen's analysis of EPAM Systems (NYSE:EPAM) led to an increase in the company's price target, now set at $238, up from the previous $221. The firm maintained its Hold rating on the stock.
The adjustment follows the acquisition of First Derivatives, which is expected to contribute positively to EPAM's revenue stream.
Bryan Bergin of TD Cowen noted that the First Derivatives deal is anticipated to yield an upside to the Street's revenue expectations. Despite ongoing structural questions, the valuation of EPAM Systems is becoming more attractive, assuming that the current steady trends continue. Bergin also expects EPAM to adopt a conservative stance when presenting its initial calendar year 2025 outlook, aiming to better manage expectations.
The initial organic growth guidance range is projected to be approximately 2-5% in constant currency. This estimate is considered reasonable by TD Cowen and indicates a modest downside at its midpoint relative to the consensus. Current consensus estimates have not fully accounted for the impact of the First Derivatives acquisition, which brings in over $200 million in annual revenues.
The acquisition is likely to create an initially positive impression for EPAM's fourth-quarter 2024 results and the first-quarter 2025 revenue guidance. However, Bergin highlighted that the expected lower target margin and the consequent cash usage might neutralize the impact on earnings per share (EPS) due to a decrease in interest income.
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