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Investing.com - Needham initiated coverage on Unisys (NYSE:UIS) with a Buy rating and a price target of $6.00 on Wednesday. The company, currently trading at $3.82 with a market capitalization of $279 million, has seen its shares decline about 40% year-to-date.
The research firm views Unisys, a global IT solutions provider serving multiple industries, as positioned to return to growth rates that mirror broader industry trends as the operating environment improves following recent cyclical pressures. According to InvestingPro data, while the company is not currently profitable, analysts expect it to return to profitability this year.
Needham expects Unisys to continue expanding its margins steadily while implementing initiatives to reduce and eventually eliminate its US pension plan within 3-5 years.
The firm believes the pension overhang removal could lead to a re-rating of Unisys shares, which currently trade at approximately 4x FY26 EV/EBITDA, representing a discount of more than 50% compared to industry peers.
Needham considers the risk-reward profile attractive at current valuations and sees potential for the valuation gap to narrow as Unisys improves its financial performance.
In other recent news, Unisys Corporation reported strong financial results for the second quarter of 2025, surpassing earnings per share (EPS) forecasts. The company achieved an EPS of $0.19, defying analysts’ expectations of a $0.29 loss. Additionally, Unisys’ revenue reached $483.3 million, exceeding the projected $444.65 million. Following this financial performance, Maxim Group upgraded Unisys stock from Hold to Buy, citing a reduced risk profile due to recent pension liability refinancing. The firm set a price target of $9.00 for the stock. Maxim Group also highlighted that Unisys is trading at a significant discount compared to its peers, with an enterprise value to EBITDA multiple of 4.1x against the peer average of 9.6x. These developments reflect a positive outlook for Unisys, as the company continues to improve its financial standing.
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