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On Friday, Bernstein SocGen Group made adjustments to its outlook on Infosys (NSE:INFY) Ltd. (INFO:IN) (NYSE: INFY), reducing the price target from INR1,780.00 to INR1,680.00. Despite this change, the firm maintained an Outperform rating on the company’s shares. According to InvestingPro data, Infosys, with its $68.88 billion market capitalization, appears undervalued based on Fair Value analysis, suggesting potential upside from current levels.
The revision follows Infosys’s recent announcement, which pointed to a challenging demand environment and issued revenue guidance for fiscal year 2026 that fell short of market expectations. The company projected a year-over-year constant currency revenue growth of 0-3%, excluding acquisitions, which did not meet analyst forecasts. The company currently generates $19.11 billion in annual revenue, with a healthy gross profit margin of 29.65%. InvestingPro analysis reveals 13 additional key insights about Infosys’s financial health and market position.
Infosys, however, has retained its margin guidance for the fiscal year at 20-22%, aligning with previous estimates. Bernstein SocGen noted that Infosys’s capacity to provide full-year guidance amidst macroeconomic uncertainties is commendable, although achieving the higher end of the revenue guidance range may be difficult given the weak exit rate from the fiscal year 2025.
The firm’s analysis indicated that Infosys’s stock has experienced a significant decline, dropping approximately 25% since the beginning of the year. Despite the reduction in the price target, Bernstein SocGen remains optimistic about Infosys’s long-term fundamentals. The firm suggested that investors consider accumulating more shares if the price were to correct further, reiterating their Outperform stance on the stock. Notable strengths include a 25-year track record of maintaining dividends, currently yielding 2.62%, and a strong financial health score of "GREAT" according to InvestingPro’s comprehensive analysis framework.
In other recent news, Infosys Ltd. reported its fiscal year 2025 financial results, which showed a soft final quarter and cautious guidance for the future. Despite these challenges, the company has favorable factors such as smaller deals and revenue carryover that could support growth in the fiscal year 2026. UBS has adjusted Infosys’ stock price target to INR1,850 from INR2,100 but maintains a Buy rating, citing limited downside potential and a solid margin of safety. Similarly, Jefferies lowered the price target to INR1,835 from INR2,150 while reaffirming a Buy rating, noting growth concerns but seeing an attractive risk-reward balance. On the other hand, Morgan Stanley (NYSE:MS) downgraded Infosys from Overweight to Equalweight, reducing the price target to INR1,740 due to concerns about weaker deal wins and a lack of recovery in discretionary spending.
Stifel analysts also revised their price target for Infosys, lowering it to $18 from $22, while retaining a Hold rating. This adjustment reflects a more cautious revenue growth projection, now estimated at 3.5% in constant currency for fiscal year 2026. The firm expects modest quarter-over-quarter growth in the second half of the fiscal year. Despite these adjustments, Jefferies continues to view Infosys favorably, highlighting it as one of its top picks in the sector alongside Coforge and Sagility. Overall, these recent developments indicate a mixed outlook for Infosys, with analysts expressing caution due to macroeconomic uncertainties while still recognizing potential growth opportunities.
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