On Tuesday, JPMorgan analysts maintained a Neutral rating on Alight Solutions (NYSE:ALIT) with a steady price target of $8.00. The firm adjusted its revenue growth expectations for the company, predicting a slower start to 2025. The revision reflects a more conservative outlook on nonrecurring project revenue and the pace of new bookings. According to InvestingPro data, ALIT currently trades at $6.78, with the broader analyst community maintaining a Buy consensus and targets ranging from $8 to $13.
Analysts pointed out that IT Services peers have not yet seen discretionary spending recover, leading to a tempered forecast for Alight Solutions’ project revenue. Despite this, JPMorgan still anticipates growth for Alight Solutions in 2025, aligning with the company’s management commentary. The analysts’ expectations for margin expansion remain largely unchanged. InvestingPro analysis reveals that management has been actively buying back shares, demonstrating confidence in the company’s future, while three analysts have recently revised their earnings expectations upward.
The firm’s report underscores a belief that Alight Solutions’ management is laying a strong foundation for future growth, with a target growth rate of 4-6%. JPMorgan predicts that Alight Solutions will achieve these targets by 2026 and is looking forward to further insights during the company’s first-quarter investor day in 2025.
JPMorgan’s stance reflects caution due to the current market environment, yet acknowledges the potential for Alight Solutions to reach its growth objectives in the medium term. The analysts’ reiteration of the Neutral rating indicates a wait-and-see approach, as they monitor the company’s progress towards its stated goals.
In other recent news, Alight Inc. has reported a slight increase in Q3 2024 revenue, driven by improved BPaaS growth and project revenue. The company also declared its first quarterly dividend of $0.04 per share. New leadership appointments have been made, with Allison Bassiouni assuming the role of Chief Delivery Officer and Deepika Duggirala stepping in as Chief Technology Officer.
In a strategic move, Cannae Holdings (NYSE:) sold 12 million shares of Alight’s common stock to meet liquidity requirements. Nevertheless, Cannae’s Chairman, William P. Foley, II, continues to express confidence in Alight’s long-term financial prospects.
Analyst firms Citi and Needham have maintained their Buy ratings on Alight shares, with Needham raising its price target from $9 to $11. These recent developments are part of Alight’s ongoing efforts to position the company for future growth.
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