Stifel increased the price target on EPAM Systems’ stock to $357 (20% upside potential) from $275 and reiterated a Buy rating after the software engineering and IT consulting services provider reported strong 2Q results.
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Stifel analyst David Grossman noted that EPAM Systems (EPAM) “outperformed” 2Q outlook and consensus on better-than-expected demand trends. Grossman stated that “the firm continues to model normalized growth of 20% and margin growth of 16%-17% next year, which should be achievable in an improving economic environment.”
The analyst further added that “he continues to view the stock as a best in class asset that should be a net beneficiary of the current pandemic and continue to grow well in excess of most of its peers.”
On August 6, EPAM reported that adjusted EPS grew 14.1% to $1.46 year-on-year, beating analysts’ expectations of $1.21. Revenues increased 14.6% to $632.4 million year-over-year, surpassing Street estimates of $597.3 million. Ongoing digital transformation and sustained focus on product development and customer engagement are key catalysts for the stock.
Needham analyst Mayank Tandon also lifted the price target on EPAM to $350 (17.7% upside potential) from $265.
Overall, EPAM has a Moderate Buy analyst consensus. Following the stock’s 40% rally year-to-date, the average price target of $282.71 implies a downside potential of 5%. (See EPAM stock analysis on TipRanks).
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