Nomura Securities Reaffirms a 'Buy' on Cognizant (CTSH); In-line 4Q & Reassuring Guidance

Nomura Securities reaffirms a 'Buy' on Cognizant Technology Solutions (NASDAQ: CTSH) price target of $83.00.

Analyst, Ashwin Mehta, said, "CTSH’s FY12F revenue growth guidance of 23% is likely to disappoint investors as it suggests limited possibilities for outperformance – which the company has historically delivered. We share this view as: 1) Europe, which declined by 6% q-q in 4Q, could see more pain (management assumed no recovery from current levels in the guidance); and 2) a flat outlook in Europe implies ~28% revenue growth from the US in FY12F (vs 34% in FY11), which though achievable, does not leave much room for comfort. That said, guidance still was ahead of our expectations and reinforces confidence in our estimates. We reaffirm our Buy as 1) the current valuation is at a ~25% discount to historical; and 2) an earnings CAGR in excess of 20% over FY11-13F is attractive."

For an analyst ratings summary and ratings history on Cognizant Technology Solutions click here. For more ratings news on Cognizant Technology Solutions click here.

Shares of Cognizant Technology Solutions closed at $70.75 yesterday.

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