In a report released on May 9, Keith Bachman from BMO Capital maintained a Hold rating on TELUS International (CDA) (TIXT – Research Report), with a price target of $3.00.
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Keith Bachman has given his Hold rating due to a combination of factors influencing TELUS International (CDA)’s performance. The company delivered higher-than-expected revenue in the first quarter, but the overall macroeconomic environment remains challenging, prompting a cautious approach to maintaining its full-year guidance. Despite the transition and investment focus for FY25, margins are expected to improve by the end of the year, although the task of enhancing both growth and profitability remains difficult, especially in the IT services sector.
Additionally, while there has been some progress in diversifying business with Meta and improvements in the Tech and Games segment, the Google business has seen a significant decline. The maintained guidance reflects a prudent stance given the economic conditions, with clients prioritizing cost reduction. The lack of near-term catalysts and the pressure on revenue growth and profits due to client concentration and a weaker demand environment in IT services contribute to the Hold rating.
In another report released today, Barclays also maintained a Hold rating on the stock with a $3.00 price target.