Globant initiated with a Buy at Goldman Sachs

Goldman Sachs initiated coverage of Globant with a Buy 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 sees Globant as the most attractive growth asset in its coverage given its “unique mix of service offerings and diversified customer base.” Goldman thinks the company’s fundamentals are set to stabilize or improve from here given a likely cyclical bottom in demand.