On Friday, CLSA analysts upgraded Infosys (NSE:INFY) Ltd. (INFO:IN) (NYSE: INFY) stock rating from Hold to Outperform, maintaining a price target of INR1,978.00. Currently trading at $19.75, the stock has seen recent fluctuations but maintains a broader analyst consensus rating of 2.43 (Moderate Buy), with price targets ranging from $17 to $27.40. The upgrade comes as analysts cite a stable demand outlook and strong cyclical tailwinds for the sector.
The analysts at CLSA expressed confidence in Infosys’ position in the market, specifically highlighting the company’s capabilities in SaaS implementations, including SAP S4Hana and Salesforce (NYSE:CRM). With annual revenue of $19.1 billion and an impressive InvestingPro Financial Health Score of 3.11 (rated as "GREAT"), the company demonstrates strong market presence. They also noted Infosys’ integration within the Nvidia (NASDAQ:NVDA) ecosystem as a positive factor. According to CLSA, these strengths position Infosys well to benefit from the ongoing democratization of AI and a revival in discretionary demand.
The upgrade decision was influenced by discussions with various company managements within CLSA’s coverage, Infosys included, which revealed no significant changes in the demand outlook for the fourth fiscal quarter of 2025. Additionally, S&P500 EPS growth forecasts are expected to remain in the mid-teens over the years 2025 and 2026, indicating a favorable environment for the tech sector.
CLSA’s analysts believe that Infosys is among the best-positioned companies to take advantage of these market conditions in both the medium and long term. The firm’s unchanged estimates and target price reflect a steady confidence in Infosys’ business trajectory and its potential for growth in the near future. InvestingPro data reveals the company trades at a P/E ratio of 24.29 and has maintained dividend payments for 25 consecutive years, with a current dividend yield of 2.14%.
The upgrade by CLSA underscores the anticipated resilience of Infosys in a market that continues to show strong demand for technological solutions and services. Infosys’ stock is expected to perform well as it leverages its expertise and strategic partnerships to meet the evolving needs of its clients. For deeper insights into Infosys’ valuation and growth prospects, InvestingPro subscribers can access 12 additional ProTips and a comprehensive Pro Research Report, offering expert analysis of what really matters for this prominent IT Services player.
In other recent news, Infosys reported impressive third-quarter financial results, exceeding expectations in revenue, margins, and earnings growth. The company achieved a quarter-over-quarter constant currency revenue increase of 1.7%, surpassing the consensus estimate of 1%. Infosys also revised its fiscal year 2025 revenue growth forecast upward, now expecting a 4.5%-5% year-over-year constant currency increase, driven by a healthy deal momentum with a total contract value of $2.5 billion. Despite these robust results, Erste Group downgraded Infosys from Buy to Hold, citing concerns about the company’s growth trajectory not aligning with the broader technology sector. Bernstein maintained an Outperform rating, noting Infosys as a top pick in the IT services industry, while UBS and BofA Securities both reaffirmed their Buy ratings, highlighting strong deal wins and margin expansion. Morgan Stanley (NYSE:MS) also maintained an Overweight rating, emphasizing broad-based recovery signs and strong free cash flow generation. These developments underscore varied analyst perspectives on Infosys, reflecting both optimism in its recent performance and caution regarding its growth potential relative to peers.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.