Spotting Infosys Limited (INFY)’s Trend Before It Is Obvious To All

Analysts at Berenberg, assumed coverage of Infosys Limited (NYSE:INFY) with Sell recommendation, according to their opinion released on April 06. Goldman analysts bumped their recommendation on INFY stock from Neutral to Buy in a separate flash note to investors on February 05. Analysts at Susquehanna downgraded the stock to a Negative call from its previous Neutral stance, in a research note that dated back to February 05.

By watching the trading activity of corporate insiders, it will become easier to get a sense of Infosys Limited (NYSE:INFY)’s prospects.

Infosys Limited (INFY) is expected to jump by -0.1 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $13.2-month high price target. This represents a whopping 34.28 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $10.81, which represents a return potential of 9.97 percent when compared to the closing price of the stock of $9.83 on Thursday, December 06. The lowest price target for the stock is $7 — slightly more than -28.79 percent from INFY’s current share price.

The shares are currently floating around the first support level of $9.74. Below this, the next support is placed in the zone of $9.65. Till the time, the INFY stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 57.97 on daily chart, which may remain a cause for concern. If the price breaks below $9.65 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $9.89 mark may result into a pull-back move towards $9.95 level.

INFY shares dropped -0.02 points or -0.2 percent on Thursday to $9.83 with a heavy trade volume of 17.159 million shares. After opening the session at $9.77, the shares went as high as $9.86 and as low as $9.71, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $40.6 billion and now has 4.13 billion shares outstanding. Infosys Limited (INFY) stock has gained 4.57 percent of market value in 21 trading days.

INFY stock has a trailing 3-year beta of 0.44, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $0.54 a share in the trailing twelve months. The stock’s value has surged 21.21 percent year to date (YTD) against a rise of 25.3 percent in 12 month’s time. The company’s shares still trade -7.7 percent away from its 1-year high of $10.65 and 26.76 percent up from 52-week low of $7.76. The average consensus rating on the company is 2.9, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Infosys Limited (INFY) are trading at a P/E ratio of 17.5 times earnings reported for the past 12 months. The industry INFY operates in has an average P/E of 22.12. Its P/E ratio went as low as 16.32X and as high as 21.35 over the 5-year span. Further, it is sporting a 3.74 on the Price-to-Sales ratio. Compare this with the industry average P/S of 534.69. 35.5 percent is the gross profit margin for Infosys Limited and operating margin sits at 23.6 percent. Along with this, the net profit margin is 21.9 percent.

INFY will be showing off its Q3 earnings on January 11. Analysts are forecasting revenue to climb 6.7 percent to $2.94B in the next fiscal quarter, while earnings are seen soaring by nearly -100 percent to $0 per share. History has shown that shares in Infosys Limited have gone down on 10 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. In last reported earnings results, it earned $0.13 per share, in line with the $0.13, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.92B, worse than the $2.93B analysts expected. Earnings are estimated to increase by 13.1 percent this year, 7.84 percent next year and continue to increase by 8 percent annually for the next 5 years.