DXC Technology (DXC) PT Lowered to $19 at Stifel

Stifel analyst David Grossman lowered the price target on DXC Technology (NYSE: DXC) to $19.00 (from $21.00) while maintaining a Hold rating.

The analyst commented: "F4Q revs in-line (down 5% y/y), margins/EPS above.FY25 (Mar) revenue, margins and FCF below. Revenue guide (down ~5% y/y) reflects macro headwinds (consulting,
consistent with peers), focus on profitability (more selective outsourcing deals) and execution issues.Margin guide -90bp y/y reflects lower revenue growth and productivity/operational investments.FCF guide (~$400mn) below trend (~$750mn/yr) and well below consensus, reflecting restructuring actions ($250mn) and transitioning from leased assets to purchased (~$100mn). Including capital lease payments FCF is ~$200mn.$250mn restructuring not in FY25 margin/EPS guide, benefits expected late FY25/FY26 (200bp gross tailwind).New CEO near-term focus operating efficiency (restructuring) better execution (chronic issue historically)higher margin/reoccurring insurance software/services (~8% of revenue)DXC is a self-help story with better execution and improving cost structure the primary near-term opportunity/catalyst. We continue to monitor their progress for inflection points; however, feel stock is fairly- priced at 8-9x FY26 UFCF (reflecting 20-25% downdraft in AMT)."

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