On Monday, Wipro (NYSE:WIT) Ltd. (WPRO:IN) (NYSE: WIT), an Indian multinational corporation that provides information technology, consulting, and business process services, saw its shares target increased by Jefferies to INR455.00, up from the previous target of INR400.00. Despite this adjustment, the firm has maintained an Underperform rating on the company's shares.
The revision follows Wipro's first-quarter financial results for the fiscal year 2025, where the company reported revenues that fell short of expectations. However, profits outpaced estimates, buoyed by higher other income.
Jefferies' assessment suggests that, although Wipro's management has indicated positive developments in its Capco and Banking, Financial Services, and Insurance (BFSI) segments, the overall revenue outlook remains challenged.
The company's second-quarter growth guidance was characterized as weak, and there was a notable decrease in bookings, which were down 12% year-over-year on a constant currency basis. This has led to a cautious stance on Wipro's growth trajectory.
In response to the revenue shortfall, Jefferies has made a downward revision to Wipro's earnings per share (EPS) estimates by up to 2%. Despite this, the analyst firm forecasts an 8% compound annual growth rate (CAGR) in EPS for Wipro from the fiscal years 2024 to 2027.
The new price target of INR455 is based on an 18 times price-to-earnings (PE) ratio. This valuation reflects Jefferies' perspective on the potential challenges that Wipro may face in expanding its revenue and maintaining profitability in the coming years.
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