Goldman Sachs Raises PT On Genpact To $17

Goldman Sachs has raised its price target on Genpact Ltd. G from $15 to $17 based on 1Q results and raises in estimates across the board. In the report, Goldman Sachs writes, “Following the set back from delayed contract ramps in 2010, solid 1Q results and an intact outlook suggest G is on a more stable footing entering 2011. In particular, G shares should find support from the 20%+ growth of its Global Client revenues (65% of total), positive headcount growth and improved employee attrition, and earnings accretion from Headstrong. We maintain Neutral as the near-term backdrop for BPO services remains a bit sluggish, and we continue to see limited margin leverage owing to a confluence of factors including wage inflation, higher employee training costs, and contract/sales investments. Longer-term, we remain constructive on offshore BPO given still nascent adoption in a large end market and increased spending towards offshore initiatives.” Goldman Sachs maintains a Neutral rating on the stock. G closed yesterday at $15.89.