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Research Alert: CFRA Keeps Hold Opinion On Shares Of Conduent Incorporated

05/10/2021 20:59

12:55 AM EDT, 05/11/2021 (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 arrive at our 12-month target of $8 (up by $2.50) by applying an EV/EBITDA of 6.6x our '21 view, below business process services (BPS) peers, due to CNDT's delayed path to more consistent fundamentals. We keep our 2021 EPS view of $0.55 and 2022's EPS of $0.61. CNDT prints first-quarter adj-EPS of $0.15 vs. $0.05, topping out consensus by $0.04. Adj-EBITDA margin widened by 210 bps to 11.2%, and above expectations of 10.5%. Revenues declined to $1.03B (or 2% Y/Y), but cleared consensus by $12M, as higher volumes and new client onboardings helped backfill lost business from prior years. Encouragingly, the company raised the low-end of its 2021 revenue outlook ($4.05B vs. $4.0B), aided by increased momentum in annual contract value or ACV (up 10% Y/Y). However, we prefer a 'wait and see' approach following stellar price performance in 2021, as difficult ACV comparables loom in Q2 2021 (90% growth Y/Y), which could temper some optimism around the shape of recovery in new client growth for the company.