Shares of Kyndryl Holdings, Inc. (NYSE:KD) hit a new 52-week low on February 9, 2024, following a downgrade from Guggenheim, which shifted its rating from “buy” to “neutral.” The stock fell to a low of $10.10 before settling at $10.57 during trading, marking a significant decline from its previous closing price of $23.49. Trading volume reached approximately 60.8 million shares, underscoring investor concerns.
This downgrade follows a series of mixed evaluations from various analysts. On the same day, Oppenheimer reaffirmed a “market perform” rating, while Zacks Research upgraded the stock from a “strong sell” to a “hold” rating. Additionally, JPMorgan Chase & Co. revised its outlook, downgrading Kyndryl from “overweight” to “underweight” and setting a target price of $16.00. In contrast, Scotiabank initiated coverage with an “outperform” rating, and Susquehanna set an ambitious target price of $35.00. Overall, the consensus rating for Kyndryl remains a “hold” with an average price target of $32.80, according to MarketBeat.com.
Institutional Investor Activity
Recent developments indicate shifting positions among institutional investors. Assetmark Inc. increased its stake in Kyndryl by 75.3% in the second quarter, now holding 775 shares valued at approximately $33,000. Meanwhile, the Employees Retirement System of Texas acquired a new position worth $49,000. Notably, Smartleaf Asset Management LLC expanded its holdings by 192.0% during the third quarter, owning 1,171 shares valued at $35,000 after acquiring additional shares. NBT Bank N A NY made headlines by boosting its stake by an extraordinary 3,220.0% in the fourth quarter, now owning 1,328 shares valued at $35,000. These moves indicate a significant interest in Kyndryl, with institutional investors owning 71.53% of the company’s stock.
Kyndryl’s Financial Performance
Kyndryl’s financial metrics present a mixed picture. The company reported earnings of $0.52 per share for the most recent quarter, falling short of the consensus estimate of $0.60. Revenue totaled $3.86 billion, slightly below expectations of $3.89 billion. Despite these challenges, Kyndryl achieved a net margin of 1.65% and a return on equity of 25.77%. Revenue growth was modest, up 0.6% compared to the same quarter last year. Analysts expect Kyndryl to post earnings of $0.73 per share for the current year.
Kyndryl, formed in November 2021 through the spin-off of IBM’s Managed Infrastructure Services, provides managed infrastructure services globally. The company focuses on critical IT systems for various industries, including financial services, telecommunications, healthcare, manufacturing, and retail. With approximately 90,000 professionals operating in over 60 countries, Kyndryl’s core offerings encompass cloud migration, network solutions, workplace services, and IT security.
As Kyndryl navigates these turbulent waters, the market will closely watch how it responds to the challenges posed by recent downgrades and shifting investor sentiment.
