J.P. Morgan Reiterates a Hold Rating on Computer SciencesBy Ryan Adsit
In a report released today, Tien Tsin Huang from J.P. Morgan reiterated a Hold rating on Computer Sciences (NYSE: CSC), with a price target of $61. The company’s shares opened today at $52.28, close to its 52-week high of $56.94.
Tsin Huang observed:
“CSC’s F2Q results showed deterioration in revenue, but came in a bit better than expected while margins were well ahead to drive a solid operating EPS beat. The company maintained its revenue growth target, but lowered FY16 EPS guidance towards the low end of the range, expectedly hurt by incremental FX headwinds. Importantly, the baseline for the upcoming HPE merger remains essentially intact post F2Q results; weaker revenue offset by higher margins to get similar earnings. Moreover, CSC remains confident of revenue growth improvement over the near term, helped by the large MetLife contract. We believe the stock should continue to trade less on stand-alone fundamentals, and more on magnitude of earnings power potential from the HPE deal (April close), where the company appears to be on track and confident about realizing $1.5B in cost cuts (incremental to HPE’s plans) by the first year post merger. We maintain our Neutral rating with five months to go before HPE deal close, recognizing short-term results could be choppy balanced by attractive earnings power potential post deal.”
According to TipRanks.com, Huang is a 4-star analyst with an average return of 2.6% and a 54.9% success rate. Huang covers the Technology sector, focusing on stocks such as Broadridge Financial Solutions Llc, Black Knight Financial Services, and Automatic Data Processing.
Currently, the analyst consensus on Computer Sciences is Moderate Buy and the average price target is $61.75, representing a 18.1% upside.
In a report released today, Cantor Fitzgerald also reiterated a Hold rating on the stock with a $53 price target.
The company has a one year high of $56.94 and a one year low of $24.27. Currently, Computer Sciences has an average volume of 1.66M.
Based on the recent corporate insider activity of 90 insiders, corporate insider sentiment is negative on the stock. Last month, John Lawrie, the President & CEO of CSC sold 4,110 shares for a total of $227,753.
Computer Sciences Corp. provides information technology solutions. It operates through the Global Business Services, Global Infrastructure Services segments. The Global Business Services segment provides technology solutions including consulting, applications services, and software. The Global Infrastructure Services segment provides managed and virtual desktop solutions, unified communications and collaboration services, data center management, cyber security, cloud solutions, cloudmail and storage as a Service, compute and managed storage solutions. The company was founded by Roy Nutt and Fletcher Roseberry Jones on April 16, 1959 and is headquartered in Tysons, VA.