JP Morgan neutral on IT stocks ahead of Q3 earnings; Check latest ratings and target prices for stocks

he 5 themes that prompted the global brokerage to turn ‘neutral’ on the stock are: pivot to cost saving, declining drags from laggard industries, pro-cyclicality, new-term Gen AI preparatory work, and low base in CY 2023.

Also, it views valuations as still at risk.

Ahead of the IT earnings season, scheduled to start on January 11, another global brokerage, JP Morgan, has provided its ‘neutral’ stance on the IT sector. The 5 themes that prompted the global brokerage to turn ‘neutral’ on the stock are: pivot to cost saving, declining drags from laggard industries, pro-cyclicality, new-term Gen AI preparatory work, and low base in CY 2023.

Individually, stocks' ratings have been changed, while targets have been raised.

JP Morgan’s view
Stock	Rating	Previous TP	New TP
Infosys	Overweight from neutral	Rs 1400	Rs 1800
HCL	Neutral from underweight	Rs 1070	Rs 1520
TCS	Neutral from underweight	Rs 2900	Rs 3700
LTI Mindtree	Retain underweight	Rs 4100	Rs 5500
Mphasis	Neutral from Underweight	Rs 1700	Rs 2700
L&T Technology Services	Overweight from Underweight	Rs 3200	Rs 5800
Tech Mahindra	Underweight	Rs 1000	Rs 1150
Tata Elxsi	Underweight	Rs 5000	Rs 6200

Earlier, Citi also gave its bearish view on IT stocks as it saw revenue growth at IT firms under its coverage universe to come in at 6 per cent in constant currency terms for FY25, as against its 2 per cent for FY24 and 8 per cent before the pandemic. Also, it views valuations as still at risk.

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IT stocks Q3 earnings