20 WIPRO share price target reports by brokerages below. See what is analyst's view on WIPRO share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Due to absence of large deal announcements, challenging outlook for key verticals, stagnating client metrics and muted growth outlook, we continue with our “SELL” rating, with a target price of Rs. 240. We value the stock at discounted 5 Yr historical average FY21E PE of 14.8x.
We estimate PAT to grow at 7.2% CAGR over FY19-22E. Given subdued results, weakness in BFSI and macro uncertainties, We maintain our HOLD rating on the stock with a revised target price of Rs. 263 based on ~13.5x FY22E EPS.
An in line quarter, scope for margin expansion and attractive valuations prompt us to be positive on the company. Coupled with digital acceleration, pick-up in execution, commentary on deal pipeline front is expected to lead to an improved growth trajectory in the next two years. This, along with reasonable valuation (~12x FY22E EPS) prompts us to maintain BUY on Wipro with a target price of Rs 285/share.
Valuation – Maintain Hold with a PT of Rs. 285: We have tweaked our earnings estimates for FY2020E/FY2021E factoring in continued decline in top accounts. We believe that Wipro’s revenue growth would continue to remain in the bottom quartile among the top-five IT companies owing to the weakness in BFSI and technology vertical. However, the company has been reporting steady execution in margins over last the three quarters despite slower revenue growth. At CMP, the stock is trading at 15x/14x of its FY2020/FY2021 earnings estimates, which is justified due to continued underperformance in revenue growth. Wipro continues to remain our least preferred stock among the top-tier companies. Hence, we maintain Hold with a PT of Rs. 285.
Our CC revenue estimates for FY19-21 are moderated by 0.4%-1.1%. We do not make any meaningful revisions to our margin estimates. However, our FY20 EPS estimate is upgraded by ~3% due to the lower ETR expectation. WPRO’s overall growth continues lagging peers, given company-specific execution challenges. Consequently, we do not see material headroom for a re-rating of the current valuation multiples. Our price target of INR260 discounts forward earnings by 15x. Maintain Neutral.
Maintain Hold with a PT of Rs. 285: We have tweaked ourearnings estimates for FY2020E/FY2021E, on account of profitability beatin Q2FY2020 and continued weakness in certain industry pockets. With continued weakness in BFSI vertical, we believe that Wipro’s revenue growthwould continue to remain in the bottom quartile among the top-five ITcompanies. At the CMP, the stock is trading at 14.5x/13.2x its FY2020/FY2021earnings estimates, which is justified due to continued underperformance inrevenue growth. Wipro continues to remain our least preferred stock among top-tier companies. Hence, we maintain Hold with a PT of Rs. 285.
We expect USD revenue growth of 3.0/5.4% and IT services EBIT% at 18.1/18.3% for FY20/21E. Wipro trades at 14.7x FY21E EPS (in-line with Tier-1 median), which is rich considering its growth profile. Our SELL stance is driven by the weakness in core growth metrics and execution challenges. Risk to our thesis include improved US/Europe macro and INR depreciation. We maintain SELL on WIPRO, post weak 1QFY20 and tepid guidance for 2Q. Wipro’s revenue growth remains the lowest in tier-1 IT. In view of growth challenges, peaking margins and taxation on buyback we further cut our target multiple. Our TP of Rs 220 is based on 12x (vs. 14x earlier) Jun-21E EPS.
Maintain Hold with a revised PT of Rs. 285: We have revised downward our earnings estimates for FY2020E/FY2021E, factoring in lower-than-expected revenue growth in Q1FY2020 along with muted growth in Q2 revenue guidance and reset of USD/INR rate. With inconsistent execution along with macro uncertainties, underperformance in revenue growth among large peers is expected to continue for FY2020E. At the CMP, the stock is trading at 15.8x/14.2x its FY2020/FY2021 earnings estimates, which is justified due to continued underperformance. Wipro continues to remain our least preferred IT company among top-tier companies. Hence, we maintain Hold with a revised PT of Rs. 285.
We believe we have been a bit generous in our EBIT margin estimates for both years. We retain our Sell rating on Wipro with a target price (TP) of Rs212 (using 11.6x target P/E based on FY21E EPS, 30% discount to the target P/E assigned to TCS). Our Sell rating on Wipro is explained by our estimate of a no-growth year in FY21 for the sector as we expect global spending to soften (see sector view on the next page). We expect Wipro to underperform industry. We believe our target P/E multiple is justified on the basis that Wipro has lagged its Tier-1 peers on organic growth, has less diversified revenue streams and also has lower return ratios versus TCS.
The impact of client specific issues in FY19 has receded with a slow & steady improvements starting to be seen. The improvement is expected to progress further in FY21E. Accompanied by digital story & execution pick up, this would lead to growth ramp up in the long term. Further, room for margin revision, healthy capital allocation policy and reasonable valuation compared to peers (~13x FY21E EPS) prompts us to maintain BUY on Wipro. Hence, we maintain target price of Rs 315/share (~16x FY21E EPS).
We believe that Wipro is struggling to achieve any degree of consistency. The timing of the recovery remains key & revenue growth of Wipro is never broad- based. The company's revenue growth has been below 1% (Q/Q CC) in 8 of the past thirteen quarters, suggesting that growth momentum is difficult to predict. We expect 4.5% & 7.3% USD revenue & EPS CAGR for FY19E-FY21E respectively & value Wipro at 14.5x Mar-21 earnings to arrive an changed target price of Rs.238. Maintain Reduce. Stock is currently trading at 17.6x FY20E EPS and 15.9x FY21E EPS.
Wipro has realigned client facing profiles and is focusing on mining strategic accounts to grow its business. With new leadership, company is investing especially in Manufacturing and expects to recover in 2HFY20. Management cited strong deal momentum with robust order booking with addition of 3 new customers in USD75mn+. As growth bounces back it will lead to a significant margin expansion owing to current lower utilisation levels which will get a kicker as volume growth increases. India will continue to remain the hotbed for talent supply en masse, making a case for increasing shift of Digital business from onsite. At CMP of INR 284.8, the company is trading at 16.3x FY21E EPS. We value the company using P.E. multiple methodology. We have given an exit multiple of 17.5x for PE to arrive at a target price of INR 298 which is an upside of 5%.
DowngradetoHoldwitharevisedPTofRs.305: We have tweaked our earnings estimates for FY2020E/FY2021E, factoring in weak guidance and continued softness in certain industry pockets. With inconsistent execution along with macro uncertainties, underperformance on revenue growth among large peers will likely continue. However, the buyback could provide some support to the stock price in the near-to- medium term. We downgrade our rating on Wipro from Buy to Hold with a revised price target (PT) of Rs. 305.
Continued strength in digital and healthy deal pipeline commentary would act as the main growth drivers for Wipro. Additionally, room for margin revision, healthy capital allocation policy and reasonable valuation prompt us to recommend BUY on Wipro. Hence, we revise target price to Rs 315 per share (~16x FY21E EPS).
Wipro’s FY20E growth outlook appears better than FY19, even as BFSI growth is likely to be slower given a high base and macro volatility. Improved IT margin performance along with continuing cash return in the form of the buy-back is likely to restrict any major decline in stock price despite tepid revenue growth. The share buy-back will boost EPS and RoE for FY20E. The buy-back size of Rs105bn implies >6% effective yield on market capitalisation. Upwardly revising our target PE multiple to 16x (from 15x earlier) to factor in healthy cash return to the shareholders, we maintain our HOLD recommendation on the stock with a revised Target Price of Rs300 (from Rs255 earlier).
Wipro IT services has narrowed EBIT margin gap with Infosys to a mere 214bp in 4QFY19. We tweak estimates after factoring in lower G&A cost, revised share count and lower other income post INR 105.0bn buyback announced. Anticipating lower IT products and ISRE revenue, we lower INR revenue by 1.1% for FY20E and increase EBITDA margin by 59bp for FY21E. Our FY20 and FY21 EBITDA margin estimates are 151bp and 400bp above Consensus, respectively. We arrive at a new TP of INR 340 from INR 330 on 15x (from 17x FY20E) FY21E P/E as we look at earnings further out into the future.
headwinds of talent crunch, increase in salaries, continued investments, increased competition, appreciating Indian rupee and a more localised workforce with likely higher bench costs will impact margins negatively in 1QFY20 on QoQ basis. Post 4QFY19, we have lowered our IT services revenue estimates for FY20/FY21 a tad but kept margin estimates broadly constant. Our EPS numbers are adjusted for the reduced number of shares after the buyback (The board announced a share buyback worth Rs105bn which would lead to reduction in outstanding shares by ~5.35%). We retain our Sell rating on Wipro with a target price of Rs219 (using 11.6x target P/E based on FY21E EPS, 30% discount to the target P/E assigned to TCS). Our Sell rating on Wipro is explained by our estimate of a no-growth year in FY21 for the sector as we expect global spending to soften. We believe our target P/E multiple is justified on the basis that Wipro has lagged on organic growth, has less diversified revenue streams and also has lower return ratios versus TCS.
Wipro made an announcement on bonus shares along with its Q3FY19 results on January 18, 2019. The ratio was one bonus share for every three existing equity share held i.e. 1:3. The record date for the same is March 7, 2019 while the ex-date for the same is today i.e. March 6, 2019. Consequently, Wipro’s share price, as per yesterday's closing price, has dropped to Rs 272/share from Rs 362/share. Currently, the stock is trading at Rs 282/share. Our target price has also been revised to Rs 282/share from Rs 375/share post bonus issue of equity shares. We revise our recommendation on the stock from BUY to HOLD as our target price has been achieved.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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