Thoughtworks initiated with a Sell at Goldman Sachs

Goldman Sachs analyst James Schneider initiated coverage of Thoughtworks with a Sell rating and $2.50 price target. The firm initiated the Americas IT services sector and is positive on a select group of names citing their secular and cyclical opportunities. The industry is in the midst of a cyclical correction driven by IT spending constraints from macro pressures across a range of industry verticals and a near-term shift in spending priorities toward artificial intelligence-focused capex and away from software and services, the analyst tells investors in a research note. It believes Thoughtworks’ fundamentals are likely to remain challenged for the foreseeable future, as a result of both cyclical headwinds in the high-end consulting market and the company’s competitive positioning from a delivery cost perspective.