Needham cuts IGate to "hold" on valuation
(Reuters) - Needham and Co downgraded iGate Global Solutions (IGTE.O) to "hold" from "buy" on valuation, sending shares of the information technology and outsourcing services provider down more than 10 percent.
The brokerage said the company's stock was trading above its previous price target of $11, boosted by a rise of more than 56 percent since mid-July when iGate reported second-quarter results.
The brokerage did not set a new price target on the stock, but said that the shares were fairly valued at current levels.
Shares of iGate were trading at $10.40, down $1.14, in morning trade Tuesday on Nasdaq. They had hit a new 52-week high of $11.75 on Monday.
"In order to maintain a "buy" rating on our current estimates we would have to value iGate shares at a premium to the offshore IT services space, and we do not believe that iGate shares deserve such a premium at this juncture," analyst Jonathan Maietta said in a note to clients.
The brokerage maintained its estimates on the company saying it has the potential to deliver higher operating margins through calendar 2008 and into 2009.
(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Savio D'Souza)
