Infosys (NYSE:INFY) Shares Gap Up - Here's Why

Key Points

• Infosys shares surged at the open, rising from a prior close of $10.76 to $11.45 and later trading near $11.64 on volume of more than 10.7 million shares.
• Analyst sentiment remains cautious: ten analysts rate the stock a Hold and one rates it Sell, giving Infosys an average “Reduce” rating and a consensus price target of $11.45.
• Infosys recently missed quarterly expectations, reporting $0.20 in earnings per share versus $0.21 expected and revenue of $4.99 billion versus estimates of $5.08 billion; institutional investors owned 16.2% of the stock.

Infosys Ltd. (NYSE:INFY - Get Free Report) shares gapped up prior to trading on Thursday. The stock had previously closed at $10.76, but opened at $11.45. Infosys shares last traded at $11.6350, with a volume of 10,788,401 shares changing hands.

Analysts Set New Price Targets

A number of research firms have commented on INFY. Wells Fargo & Company set a $11.00 target price on shares of Infosys and gave the company an "equal weight" rating in a research report on Friday, June 26th. Jefferies Financial Group reissued a "hold" rating on shares of Infosys in a research note on Monday, August 31st. HSBC set a $11.47 price target on shares of Infosys and gave the company a "hold" rating in a research note on Friday, July 24th. CLSA cut shares of Infosys from an "outperform" rating to a "hold" rating in a research report on Wednesday, August 19th. Finally, JPMorgan Chase & Co. reiterated a "neutral" rating and issued a $10.90 target price (down from $12.70) on shares of Infosys in a report on Friday, July 24th. Ten research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, Infosys currently has an average rating of "Reduce" and a consensus price target of $11.45.

Infosys Stock Performance

The company has a 50 day moving average of $11.65 and a 200-day moving average of $12.12. The stock has a market cap of $46.27 billion, a price-to-earnings ratio of 14.07, a price-to-earnings-growth ratio of 2.48 and a beta of 0.87.

Infosys (NYSE:INFY - Get Free Report) last released its earnings results on Thursday, July 23rd. The technology company reported $0.20 earnings per share for the quarter, missing the consensus estimate of $0.21 by ($0.01). The firm had revenue of $4.99 billion during the quarter, compared to analyst estimates of $5.08 billion. Infosys had a net margin of 16.38% and a return on equity of 33.91%. On average, research analysts anticipate that Infosys Ltd. will post 0.81 EPS for the current year.

Institutional Investors Weigh In On Infosys

Several large investors have recently added to or reduced their stakes in INFY. QRG Capital Management Inc. boosted its position in Infosys by 4.5% in the 2nd quarter. QRG Capital Management Inc. now owns 30,832 shares of the technology company's stock valued at $323,000 after buying an additional 1,335 shares during the period. Sequoia Financial Advisors LLC increased its position in shares of Infosys by 32.8% during the second quarter. Sequoia Financial Advisors LLC now owns 109,291 shares of the technology company's stock worth $1,146,000 after acquiring an additional 26,984 shares during the period. Tidal Investments LLC increased its position in shares of Infosys by 106.3% during the second quarter. Tidal Investments LLC now owns 125,298 shares of the technology company's stock worth $1,314,000 after acquiring an additional 64,563 shares during the period. WINTON GROUP Ltd acquired a new stake in shares of Infosys in the second quarter valued at $1,907,000. Finally, Engineers Gate Manager LP boosted its holdings in Infosys by 98.7% in the second quarter. Engineers Gate Manager LP now owns 381,772 shares of the technology company's stock valued at $4,005,000 after purchasing an additional 189,631 shares during the period. 16.20% of the stock is owned by hedge funds and other institutional investors.

About Infosys

Infosys Ltd. is a digital services and consulting company, which engages in the provision of end-to-end business solutions. It operates through the following segments: Financial Services, Retail, Communication, Energy, Utilities, Resources, and Services, Manufacturing, Hi-Tech, Life Sciences, and All Other. The company was founded by Dinesh Krishnan Swamy, Senapathy Gopalakrishnan, Narayana Ramarao Nagavara Murthy, Raghavan N. S., Ashok Arora, Nandan M. Nilekani, and S. D. Shibulal on July 2, 1981 and is headquartered in Bangalore, India.

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