Cognizant (CTSH) Bullish View Maintained at Needham & Company Amid Sell-Off
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Needham & Company analyst Mayank Tandon reiterated a Buy rating and $68 price target on Cognizant Technology Solutions (NASDAQ: CTSH) after the company announced: 1) President Gordon Coburn has resigned and will be replaced by Rajeev Mehta, who currently serves as the CEO of IT services for the company 2) the company has launched an internal investigation into potential improper payments that were made in relation to Indian facilities.
Shares are down 14% amid the news.
Tandon commented, "While the resignation is sudden and Gordon Coburn has played an instrumental role in CTSH's long-term success, we believe that the company’s deep bench and experienced executive team, including Rajeev Mehta, should allow for a relatively smooth transition with limited disruption and distraction internally. Given the early stage and scarcity of detail on the payments investigation, it does not currently alter our forward-looking view of the stock, but we will continue to monitor the situation. We attribute the fall in the stock today more to the investigation than the resignation itself, though investors may be concerned that the two events are related."
Shares of Cognizant Technology Solutions closed at $55.00 yesterday.
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