Kyndryl Holdings should be bought on current weakness, says Oppenheimer

Oppenheimer notes Kyndryl Holdings (KD) reported Q1 adjusted EPS of 37c, vs. its/Street’s 40c/36c, helped by a about 100bps year-over-year improvement in PTI margins. The quarter saw a strong contribution from the three-A’s initiative and Consult/hyperscaler revenues. However, constant currency revenues fell 2.6% year-over-year, as Kyndryl Holdings saw signing delays at a handful of large focus accounts. Management believes these delays are esoteric and organic growth should return in Q2 2026, Oppenheimer says. In fact, management maintained FY26 guidance calling for constant currency revenue growth of 1%. The firm would take advantage of the stock’s current weakness, as the company should return to organic growth next quarter. Oppenheimer has an Outperform rating on the shares with a price target of $55.