On Monday, Goldman Sachs adjusted its price target on shares of Wipro (NYSE:WIT) Ltd. (WPRO:IN) (NYSE: WIT), increasing it to INR440.00 from the previous INR430.00. Despite this change, the firm maintained a Sell rating on the stock.
The price target revision comes with a cautious outlook from the analyst at Goldman Sachs. The analyst expects Wipro to experience continued pressure on discretionary spending, which could impact the company's revenue growth. In particular, a forecasted revenue growth of +1.4% year-over-year in the fiscal year 2025 is projected to be the slowest within the analyst's coverage universe.
Goldman Sachs has also revised its revenue and EPS estimates for Wipro for the fiscal years 2025 to 2027, lowering them by up to 1%. This adjustment reflects the firm's expectations of potential headwinds Wipro may face in the coming years.
The new price target of INR440.00, which also corresponds to $5.3 per American Depositary Receipt (ADR), is based on a price-to-earnings (P/E) valuation method. The increase in the target price is partly attributed to the analyst's decision to roll forward their valuation by three months.
Wipro, an information technology, consulting, and business process services company, has been navigating a challenging environment where discretionary spending by clients can significantly influence revenue streams. The updated price target and the maintained Sell rating by Goldman Sachs indicate a cautious stance on the company's financial performance prospects.
In other recent news, Wipro Ltd. has seen significant developments. The company's stock rating has been upgraded from 'Underperform' to 'Outperform' by brokerage firm CLSA, indicating a positive outlook on the company's growth trajectory. This upgrade is attributed to Wipro's successful strategies, particularly in securing large deals.
Moreover, Investec upgraded Wipro's rating from 'Sell' to 'Hold' and increased the price target, highlighting the company's recent successes in securing significant deals and improvements in key business areas.
Furthermore, Wipro has expanded its partnership with Hanesbrands (NYSE:HBI) Inc., aiming to advance the apparel company's digital and business transformation initiatives. In another strategic collaboration, Wipro has teamed up with Hewlett Packard Enterprise (NYSE:HPE) to introduce a new artificial intelligence (AI) solution aimed at improving operational efficiency and customer experience.
The company also announced that its Annual General Meeting (AGM) for shareholders will be conducted via video conferencing. These are recent developments that reflect Wipro's commitment to strategic growth, operational success, and strong corporate governance.
InvestingPro Insights
While Goldman Sachs maintains a cautious stance on Wipro Ltd. (NYSE: WIT), InvestingPro data and tips offer additional perspectives that may be valuable for investors. Wipro holds a strong Piotroski Score of 9, suggesting robust financial health, and management has been actively buying back shares, indicating confidence in the company's value. Moreover, Wipro's balance sheet appears resilient, with more cash than debt, which could provide a buffer against potential market headwinds.
From a valuation standpoint, Wipro's market capitalization stands at $33.0 billion, with a price-to-earnings (P/E) ratio of 25.33 as of the last twelve months ending Q4 2024. The company's performance has also been notable in the short term, with a significant return over the last week of 4.63% and an impressive 18.45% return over the last month. These metrics, especially the stock's recent momentum, contrast with the cautious outlook from Goldman Sachs and may suggest a more nuanced picture for investors.
Investors looking to delve deeper into Wipro's financials and stock performance can find additional InvestingPro Tips by visiting https://www.investing.com/pro/WIT. With the use of promo code PRONEWS24, investors can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further insights. There are 14 more tips available on InvestingPro, offering a comprehensive analysis that could help in making an informed investment decision.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.