Nucor earnings beat by $0.08, revenue fell short of estimates
On Tuesday, JPMorgan analyst Tien-tsin Huang revised the price target for Cognizant Technology Solutions (NASDAQ:CTSH) to $81 from the previous $92, while retaining a Neutral stance on the stock. The company, with a market capitalization of $35.8 billion and annual revenue of $19.7 billion, maintains a strong financial health score of "GOOD" according to InvestingPro analysis. This adjustment comes ahead of Cognizant’s scheduled earnings report for the first quarter, which will be released after market hours on Wednesday, April 30.
Huang noted that Cognizant demonstrated solid demand trends in the last quarter, with large-scale deals performing well and management’s outlook being generally optimistic. The company’s strong market position is supported by healthy financials, including a comfortable current ratio of 2.09 and moderate debt levels. This is in contrast to the less favorable results and outlooks from industry peers such as TCS, Infosys (NSE:INFY), and Wipro (NYSE:WIT), which have highlighted a challenging macroeconomic environment.
Despite the broader industry concerns, Huang anticipates that Cognizant will stand out in its first-quarter performance. This expectation is based on the company’s practice of providing guidance later in the quarter, which affords it higher visibility. Additionally, benefits from foreign exchange rates, estimated at approximately 100 basis points to CY25, and Cognizant’s significant involvement in the financial services and healthcare sectors, which account for around 60% of its revenue, are seen as potential buffers against macroeconomic headwinds.
While JPMorgan has made slight adjustments to its estimates for Cognizant, it remains within the guided range and slightly above consensus on Wall Street. The firm expresses a favorable view of Cognizant as it enters its earnings report but maintains a stance of neutrality until there is more evidence of sustainable growth that ranks among the top in its sector.
In other recent news, Cognizant Technology Solutions has made significant financial moves by expanding its stock repurchase program by $2 billion, alongside an additional $500 million in planned share buybacks for the year, bringing the total to $1.1 billion. This decision underscores the company’s confidence in its strategic direction and future growth potential. At its recent Investor Day, Cognizant outlined its financial goals, aiming for top-quartile growth among peers by 2027, with annual operating margin improvements. The company also highlighted its focus on data, AI, platforms, engineering, and cloud solutions as key areas for growth. Analysts have maintained their ratings on Cognizant, with TD Cowen setting a price target of $80, RBC Capital Markets at $93, and BMO Capital Markets at $94. These firms have noted Cognizant’s strategic initiatives and its commitment to returning value to shareholders through increased share buybacks. Furthermore, Cognizant’s stock experienced a dip alongside IBM (NYSE:IBM), following Accenture (NYSE:ACN)’s reported challenges with federal contracts, reflecting broader industry concerns about shifts in U.S. government spending.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.