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Research Alert: CFRA Raises Opinion On Cognizant Technology Solutions To Buy From Hold

· 02/05/2021 09:28

02:25 PM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We bump our 12-month price target by $8 to $85, 21.4x our 2021 EPS estimate, and near the high end of CTSH's three-year historical average. We trim our 2021 EPS estimate to $3.98 from $4.12 and introduce 2022's EPS estimate at $4.48. CTSH prints Q4 adj-EPS of $0.67 vs. $1.07, falling short of consensus by $0.22. Quarterly revenues came in at $4.18B, a decline of 2.3% Y/Y, and was shy of consensus by $60M. The big story of the quarter was a surprise customer ramp-down in Financial Services, which created a large headwind for revenues ($107M), adjusted operating margin (down 300 bps to 11.1%), and adj-EPS ($0.25 one-time charge). With the stock now largely discounting mixed quarterly results following recent price underperformance, we upgrade shares to Buy. We think the upper end of the company's 2021 revenue growth target (4%-7% at constant currency) is achievable, the customer loss will prove to be isolated in nature, and the fundamental picture will continually improve in coming quarters.