Infosys shares jump 7.6% after Q3 results; what do analysts recommend?

Infosys share price today: Shares of IT major Infosys experienced a significant uptick on Friday, climbing by up to 7.6% to reach Rs 1,613 on the Bombay Stock Exchange. This surge Infosys’s Q3 results with investors optimistic that the performance may mark the end of the earnings downgrade cycle for Infosys, with a positive outlook for the sector, especially in the US throughout 2024.
At 12:04 PM, Infosys stock was trading at Rs 1,608.20, up Rs 113.20 or 7.57% on the BSE.
According to ET, the notable increase in Infosys shares today represents the most significant single-day gain since July 16, 2020.Despite reporting a 1% quarter-on-quarter (QoQ) revenue decline in constant currency terms, Infosys has revised its revenue growth guidance to 1.5-2% in constant currency terms, a narrower band compared to the previous range of 1.0-2.5%. This implies a QoQ cc growth of -1% to 0% for Q4.
While the EBIT margin experienced a 70 basis points (bps) decline QoQ, totaling 20.5%, it exceeded estimates by 30 bps. The impact of the wage hike was lower than expected, contributing to this positive outcome.

Here’s what financial analysts are offering in terms of insights into Infosys’ Q3 results:
Nomura
Minor adjustments to FY24-26F EPS, with a target price of Rs 1,500 set at an unchanged 20x FY26F EPS. The stock is currently trading at 20.9x FY26F EPS.
Motilal Oswal
No significant changes in FY24-FY26 EPS estimates post the Q3FY24 results. Infosys is seen as a beneficiary of the uptick in IT spending, valued at 22x FY26E EPS, with a reiteration of a BUY rating and a target price of Rs 1,750.
Nuvama
A positive upgrade to FY24/25/26 estimates by -0.3%/+1.3%/+2.2%. Infosys continues to be valued at 24x FY26 PE, maintaining a ‘BUY’ recommendation with an increased target price of Rs 1,850.
Emkay Global
Expectations for growth acceleration in FY25 due to large deal ramp-ups, a strong deal pipeline, and anticipated recovery in discretionary spending. Minimal adjustments to FY24-26 EPS estimates, retaining a BUY rating with an unchanged target price of Rs 1,850 at 25x its Dec-25E EPS.