J.P. Morgan Reduces PT on VanceInfo to $38, Maintains Buy (VIT)

J.P. Morgan reduced its price target on VanceInfo VIT from $42 to $38. This reduction was not enough to persuade J.P. Morgan to downgrade its rating from Overweight, however. In a research report published today, J.P. Morgan states, "Remain Overweight with Dec-11 price target of US$38 (down from US$42). Adjust down FY11/12 EPS forecast by < 1%, but we expect VIT to likely trade weaker in near-term, given margins pressure. Our PT implies 46.1x FY11 and 32.7x FY12 dil. adj. EPS, or FY12 PEG ratio of 1.4x assuming medium-term 25% earnings CAGR. Company could lack drivers until 2H11, when visibility on bill rates and hiring costs is higher. We are positive on the sector, and advise investors to accumulate on weakness." Monday's trading was a disaster for VanceInfo, as its shares lost 10.16% to close the day at $28.31.