Why This Alight Analyst Says Company Is 'Recession-Resilient'

Shares of Alight Inc ALIT fell sharply in the premarket session on Friday — but the valuation of the stock does not reflect the company’s “recession-resilient business model” and potential to generate 16% EPS growth, according to BofA Securities.

The Alight Analyst: Heather Balsky initiated coverage of Alight with a Buy rating and $11 price target.

The Alight Takeaways: The stock is trading at a 21% discount to its Human Capital Management (HCM) peers, despite the company’s higher growth potential, Balsky said in the initiation note.

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“We model a 16% 2022-24E EPS CAGR for Alight vs. 5.5% growth expected for peers based on consensus,” the analyst wrote. “We expect the gap to narrow as Alight posts durable, outsized growth even in a 2023E recession scenario,” she added.

“Alight’s legacy HCM business “provides a strong backbone,” while its BPaaS “takes growth to the next level,” Balsky said.

ALIT Price Action: Shares of Alight were down 2.06% at $8.07 Friday afternoon.

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