Although Gartner Inc (NYSE: IT) reported its
2Q results ahead of expectations, they reflected “increased pockets of weakness,” Baird’s Jeffrey P. Meuler said in a report. He
maintained an Outperform rating on the company, while reducing the price target from $111 to $109.
Gartner reported its quarterly revenue at $610 million, representing 12 percent growth and beating the consensus estimate by 2
percent. Adj. EPS came in at $0.71, higher than the consensus expectation of $0.68.
Increased Pockets Of Weakness
Gartner’s results reflected “a mild incremental deterioration in Research metrics,” possibly due to “increased pockets of
weakness (in weak geographies/industries and client-specific economic challenges),” analyst Jeffrey Meuler mentioned.
Related Link: HCL
Recognized As A "Leader" In Gartner Magic Quadrant
Total Contract Value growth decelerated to 13 percent, from 14 percent in the previous quarter. Client retention metrics also
declined by 1 percent q/q.
“Our view is there does not appear to be a step function change in trend, but rather gradual incremental headwinds from
increased pockets of relative weakness. We expect continued strong organic Research growth,” Meuler commented.
Potential Acquisition
In May 2015, Gartner had announced a new share repurchase authorization of $1.2 billion. This was expected to be executed over
~2.5-3 years. The analyst pointed out, however, that over the past four quarters, Gartner had repurchased shares worth merely $120
million.
Moreover, the company announced an expanded credit facility, citing “favorable financing conditions” and “greater flexibility,”
Meuler mentioned.
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Latest Ratings for IT
Date |
Firm |
Action |
From |
To |
Mar 2016 |
Sterne Agee CRT |
Initiates Coverage on |
|
Buy |
Feb 2016 |
BMO Capital |
Maintains |
|
Market Perform |
Feb 2016 |
Barclays |
Maintains |
|
Equalweight |
View More Analyst Ratings for
IT
View the Latest Analyst Ratings
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