Epam Systems initiated with a Neutral at Goldman Sachs

Goldman Sachs initiated coverage of Epam Systems with a Neutral rating and $200 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 Epam can eventually return to double-digit growth once demand for new technology builds returns, but says the business will continue to see “muted trends” in the near term given nominal pressure from ongoing changes to the comapny’s delivery footprint and shift to India-based delivery.