infosys, analysts and investors

Here's the low-down on the analysts take on the Infosys stock as of today.

You could lose money on the stock according to IDBI Capital, while you could gain as much as 22% as per Jefferies. 

Is there an investor who is betting on the stock for one year? The person should be a trader, rather than investor, for the investors bet on the probability that the business behind the stock is going to do well over a long period. 

My take is that if the earnings per share grow at 5% over the next 10 years, the stock is going to give a return of about 8% including dividends, and a little more than 5% excluding dividends. 

By doing the buyback, Infosys has already done the job of EPS increase for the next year. Post buyback, Infosys will have 2173 million shares outstanding down from 2285 million. Operating earnings remaining constant, the earnings per share will increase by a little over 5%. Any upside in earnings, will increase the per share growth rate.

It is fair to say that for Infosys the operating earnings are expected to grow, not fall, even if it is at a lower rate. If it performs buybacks on a regular basis over the period, yeah, with much lower amounts, 5% increase in per share earnings should not be too difficult, again probabilistically speaking. Any higher growth rate should only increase the rate of return over the period. How much can Infosys grow? That is the question everyone has, and everyone is guessing. During these uncertain times, the guesswork is murkier. 

So, do you want it? Or, is there any other business that you can look at giving you more than what Infosys can give? Tough times, isn't it?