What Happened?
A number of stocks fell in the afternoon session after a key inflation report showed producer prices surged more than anticipated in April. The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI), which measures inflation before it reaches consumers, jumped 1.4% for the month.
This was the largest monthly increase since March 2022. On an annual basis, producer prices rose 6%, the highest since December 2022, partly driven by elevated energy costs. This hotter-than-expected data suggested that inflationary pressures might persist in the supply chain, which could lead companies to pass on higher costs to customers. Such trends often attract the attention of the Federal Reserve and influence future monetary policy decisions, creating uncertainty for investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Data & Business Process Services company Equifax (NYSE: EFX) fell 3.4%. Is now the time to buy Equifax? Access our full analysis report here, it’s free.
- Business Process Outsourcing & Consulting company FTI Consulting (NYSE: FCN) fell 4.5%. Is now the time to buy FTI Consulting? Access our full analysis report here, it’s free.
- IT Services & Consulting company Gartner (NYSE: IT) fell 5.4%. Is now the time to buy Gartner? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company Korn Ferry (NYSE: KFY) fell 4.6%. Is now the time to buy Korn Ferry? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company ePlus (NASDAQ: PLUS) fell 3.7%. Is now the time to buy ePlus? Access our full analysis report here, it’s free.
Zooming In On Gartner (IT)
Gartner’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 27.3% on the news that the company lowered its full-year revenue forecast, which overshadowed a better-than-expected second-quarter earnings report.
The company trimmed its full-year revenue projection to at least $6.45 billion, down from a previous forecast of around $6.54 billion. This revised outlook fell short of analyst expectations.
While Gartner's second-quarter revenue of $1.69 billion and adjusted earnings per share of $3.53 both beat estimates, investors focused on the disappointing guidance for the remainder of the year. The firm also guided its full-year adjusted profit to $11.75 per share, which was below the market's consensus estimate.
Gartner is down 39.2% since the beginning of the year, and at $144.17 per share, it is trading 67.9% below its 52-week high of $449.52 from May 2025. Investors who bought $1,000 worth of Gartner’s shares 5 years ago would now be looking at only $627.92.
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