2023-04-13 13:58:13 ET
Infosys ( NYSE: INFY ) is trading around -10% on Thursday after Nomura and Citigroup both downgraded the IT company from Buy to Neutral following lower-than-expected results for Q4.
Nomura cited the earnings and revenue misses for Q4 and weak guidance for the next fiscal year for its downgrade.
Infosys posted a Q4 GAAP EPS of $0.18 and revenue of $4.55B, missing consensus estimates by $0.02 and $180M respectively. Revenues fell around 3.2% sequentially in constant currency terms due to weak volume.
The firm recorded unplanned project ramp-downs and delayed client decision-making, leading to a weak quarter. Nomura also highlighted a weak outlook, with revenue guidance suggesting a "significant moderation in demand" and a widened guidance band indicating "higher uncertainty in the demand environment".
Citi cited a weak Q4 and guidance as well, although margins were "resilient". It sees significant near-term uncertainty, but revenue growth remains better than peers and Infosys remains "well positioned on digital/cloud", benefiting from a demand recovery when it happens.
The SA quant system also has a Hold rating on the stock.
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Infosys in red after downgrade by Nomura, CIti