2024’s Worst-Performing IT Stock Gets Double Upgrade

This IT stock struggled in 2024, declining by 10%. This was due to a 15% downgrade in EPS estimates and a 9% price-to-earnings (PE) derating. However, global brokerage firm Jefferies recently issued a double upgrade for LTIMindtree. They raised its rating from “Underperform” to “Buy” and increased its price target from ₹5,450 to ₹6,650. This means a potential 16% gain from previous closing levels.

Several factors drove this positive outlook. LTIMindtree’s quarterly results exceeded expectations, showing strong performance. The company’s focus on digital transformation and cloud services positions it well in the market. Industry trends are also favorable, supporting LTIMindtree’s growth potential.

Jefferies believes LTIMindtree is well-positioned to benefit from market demand. The recent stock price correction made its valuations more attractive. The stock trades at 30 times its one-year forward PE, matching its five-year average.

In a November 2024 analyst meet, LTIMindtree shared its goal of reaching $10 billion in revenue by 2031-32. They plan to grow key verticals like BFSI and Tech, and expand in manufacturing, resources, healthcare, lifesciences, and consumer sectors.

Out of 42 analysts, 24 have a “Buy” rating, seven have a “Hold” rating, and 11 recommend “Sell”. Following the upgrade, the stock saw a significant rise, reflecting renewed investor confidence.