Nomura Securities Downgrades Cognizant Technology Solutions (CTSH) to Neutral
- Wall St. touches two-week high on deals, strong earnings
- Unusual 11 Mid-Day Movers 10/24: (UNIS) (MBVT) (ACCO) Higher; (TDW) (INO) (BCC) Lower
- AT&T (T) to Acquire Time Warner (TWX) for $107.50/Share
- Rockwell Collins (COL) to Acquire B/E Aerospace (BEAV) for $6.4B
- TD Ameritrade (AMTD) to Acquire Scottrade in $4B Cash & Stock Deal
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
Nomura Securities downgraded Cognizant Technology Solutions (NASDAQ: CTSH) from Buy to Neutral with a price target of $62.00 (from $65.00).
Analyst Ashwin Mehta commented, "CTSH cut its FY16F revenue growth guidance for the second time in two quarters to 8.5-9.5% (vs 10-14% in 1Q and 10-13% in 2Q), citing: 1) pullback in discretionary spend, Brexit impacts and pressure at banks/insurance clients amid the low interest regime; 2) slowdown in healthcare demand due to a lull in activity ahead of pending large M&As; and 3) demand issues at a handful of clients in other verticals. Stock upside appears limited given: 1) issues in 70% of the business (BFSI + healthcare), 2) weak 4QFY16 exit growth of ~9% y-y, which is likely to limit outperformance in FY16F and material acceleration in FY17F, and 3) the stock looks fairly valued at 18.4x FY17F EPS for FY15-17F revenue/EPS CAGRs of 10%/11%, with the growth gap vs peers narrowing. We believe the case for a material premium to Indian IT peers is weakening as growth converges with lower margins/return ratios and cash returns."
Shares of Cognizant Technology Solutions closed at $59.71 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Oppenheimer Raises Price Target on Microsoft (MSFT) to $65 Following 1Q Beat
- KLR Group Cuts Price Target on Southwestern Energy (SWN) to $14
- JPMorgan Downgrades ARIAD Pharmaceuticals (ARIA) to Underweight
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change, Downgrades
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!