Key Takeaways
- Jefferies analysts expect that a slide in business IT spending will bottom out soon.
- That could help shares of EPAM Systems, they wrote, upgrading the shares to a a buy and raising their price target.
- EPAM will benefit from artificial intelligence demand and an attractive valuation, Jefferies wrote.
Jefferies sees a slowdown in business IT spending bottoming out soon, which could lift shares of EPAM Systems (EPAM).
Analysts at Jefferies lifted their rating on EPAM, a provider of software development and digital platform engineering services, to buy from hold, boosting its price target from $202 to $237. Its shares were recently up more than 5%, to around $210.
The analysts said business discretionary spending remains “at bay,” with only the most vital IT projects, or parts of a project, getting done. But “there is a natural floor to demand for IT services,” they wrote, and said and they think the market is near those levels.
Along with a recovery in customer demand, Jefferies sees EPAM benefiting from the long-term advantages of demand for artificial intelligence (AI) and cited “an attractive valuation for a high-quality asset.”
TradingView
EPAM Systems shares fell to their lowest level since the outbreak of the COVID-19 pandemic last month. While they’ve risen today, they’ve lost about 30% of their value this year.
Wall Street has a consensus share price target of around $223 on EPAM shares, according to Visible Alpha.