On Friday, TD (TSX:TD) Cowen made an adjustment to the price target for shares of WNS Limited (NYSE:WNS) stock, a global Business Process Management (BPM) leader. The firm reduced its price target to $64.00 from the previous figure of $70.00. Despite this change, the firm maintained its Buy rating on the stock.
The adjustment comes after WNS presented an initial fiscal year 2025 organic growth outlook, which ranges between 0-5% on a constant currency (CC) basis. This forecast fell short of expectations due to weaker volume-based and discretionary work, which are believed to have an incremental weight of approximately 3 percentage points.
WNS's conservative projection adds to a series of disappointments over the last 12 months, which has led to a sharp sell-off in its shares. However, the valuation of WNS is noted to be significantly discounted, with a calendar year 2025 price-to-earnings (PE) ratio of 8.5 times.
The firm acknowledges that while WNS appears to have incorporated a more prudent view in its outlook, the company will need to deliver concrete results to convert skeptics. The new price target of $64 reflects this cautious stance.
InvestingPro Insights
As WNS Limited (NYSE:WNS) navigates through its fiscal challenges, InvestingPro data and tips shed light on some key aspects of the company's financial health and market performance. With a market capitalization of $2.37 billion and a P/E ratio standing at 16.56, WNS shows a moderate valuation in the market. The company's earnings multiple may appear low, which is reflected in its price-to-earnings growth (PEG) ratio of 0.65, indicating potential undervaluation relative to its earnings growth.
InvestingPro Tips highlight that WNS has a perfect Piotroski Score of 9, suggesting strong financial health, and management has been actively buying back shares, signaling confidence in the company's value. Additionally, WNS's stock has experienced a significant decline over the last week, which could present an opportunity for investors considering the company's fundamentals and a current trading price near its 52-week low.
For those seeking more in-depth analysis, InvestingPro offers additional tips on WNS, which can be explored further at https://www.investing.com/pro/WNS. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 9 more InvestingPro Tips available, investors can gain a comprehensive understanding of WNS's investment potential and make informed decisions.
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