U.S. IT & BPO: JPM says market imbalance benefits growth stories

CONDUENT

17/08/2021 09:33

** J.P.Morgan says U.S. Information Technology (IT) and
Business Process Outsourcing (BPO) cos are experiencing strong
demand counterbalanced by shortage of workers
    ** Brokerage downgrades DXC Technology  DXC.O  and Rackspace
Technology  RXC.O  as JPM believes war for talent creates
"relative disadvantage for turnarounds vs. cleaner growth
stories"
    ** JPM says IT services and BPO demand appear to be the
strongest since 2010/2011 and this time, demand for Digital
projects is high
    ** "We believe the industry could already be 2 or 3 quarters
into the uptrend... We expect the uptrend to continue at least
through the year end (or into the next year)" - JPM
    ** Brokerage's top pick in its IT and BPO coverage is Taskus
Inc  TASK.O  which JPM says offers the highest growth profile
and many multiple expansion opportunities in the space
    ** JPM changes rating and PTs on the following companies:
    
    
 Company     Rating             Current     Previous
 Name                           Target      Target
                                Price       Price
 Cognizant   "Overweight"       $90         $83
 WNS         "Overweight"       $99         $89
 Holdings                                   
 Globant     "Overweight"       $340        $284
 Accenture   "Overweight"       $364        $308
 Genpact     "Overweight"       $61         $55
 ExlService  "Neutral"          $134        $116
 Holdings                                   
 Conduent    "Neutral"          $9          $8
 DXC         To "Underweight"   $45         $42
             from "Neutral"                 
 Perficient  To "Overweight"    $126        $100
             from "Neutral"                 
 Rackspace   To "Neutral" from  $18         $19
             "overweight"                   
 TaskUs      "Overweight"       $52         $50
 
 (Reporting by Aniruddha Ghosh in Bengaluru)
 ((Aniruddha.Ghosh@thomsonreuters.com; 91 83 83 81 2416;))