UPDATE: BofA Securities Downgrades DXC Technology (DXC) to Underperform Expecting Break-Even to be Pushed Out

March 9, 2022 6:03 AM EST
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Price: $28.86 -1.97%

Rating Summary:
    7 Buy, 8 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 2 | Down: 23 | New: 24
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(Updated - March 9, 2022 7:56 AM EST)

BofA Securities analyst Jason Kupferberg downgraded DXC Technology (NYSE: DXC) from Buy to Underperform with a price target of $30.00 (from $45.00) over concerns that breakeven revenue growth is likely to be delayed. BofA is modeling break-even organic revenue growth for the 9/22 quarter but recent macro developments could cause this to take longer and inhibit multiple expansion.

The analyst stated "In our view, DXC faces a potentially daunting challenge of managing its delicate company-specific turnaround (which has shown nice signs of progress) amid a macro backdrop that has quickly turned less favorable. In F21, DXC earned 45% of revs from Europe, some which was inherited when DXC bought Russia-based Luxoft in June 2019. On 3/4/22, DXC announced plans to exit the Russian market, where it has ~4,000 employees (mostly serving Russian clients), representing <1% of total revs. In addition, we believe DXC employs 4,000 people in Ukraine, supporting about $250M in revenues, or 1.5% of total. Depending on the pace and path of the Russia/Ukraine conflict, it is plausible that European enterprise spending on IT services could slow down, at least temporarily."

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

Shares of DXC Technology closed at $30.86 yesterday.

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