CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our target by $11 to $372, 34x our ’24 EPS view, below IT’s three-year average (~36x) on decelerating growth. We lift our ’24 EPS view by $0.32 to $10.95 and lower ’25’s by $0.02 to $12.90. IT posted Q1 sales of $1.47B (+5% Y/Y, near consensus) and EPS of $2.93 (+2% Y/Y, above consensus). Renewal issues with tech vendor customers hurt contract value growth during Q1 (+6.9% Y/Y ex-FX), with Global Technology Sales (78% of total CV) up just 5.4%. While this was well telegraphed, with a high portion of business up for renewal in Q1, we remain cautious on calling a bottom given continued macro headwinds. We similarly view total wallet retention, which fell 320 bps Y/Y (80 bps Q/Q) to 102.8%. Consulting (+6%) was strong during the quarter, with sales and backlog growth (+17%) outperforming many peers, but lumpiness in the business makes it unclear if this is a sustainable trend. We think IT’s target of 12%-16% CV growth is at risk given current struggles and the extremely low tenure of its sales force.