DBS analyst Sachin Mittal maintained a Buy rating on Cognizant (CTSH – Research Report) today and set a price target of $94.00.
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Sachin Mittal has given his Buy rating due to a combination of factors, including Cognizant’s strategic focus on winning large deals and improving revenue growth. The company’s ability to secure significant contracts, each valued over USD100 million, demonstrates strong deal momentum, positioning it well amidst a cautious market outlook. Additionally, Cognizant’s initiatives such as the NextGen program aim to gradually enhance EBIT margins by optimizing operations and achieving cost savings, despite challenges in the financial services segment and broader economic uncertainties.
Furthermore, Cognizant’s investment in AI capabilities, with a commitment of USD1 billion over the next three years, is expected to drive future growth through platform modernization and workforce upskilling. The target price for the stock has been raised to USD94, reflecting positive expectations for earnings growth, projected to outpace peers at a CAGR of 15% over FY25F-27F. Despite past earnings challenges, the stock is currently trading at a significant discount compared to its closest competitors, offering a potentially attractive valuation for investors.
Mittal covers the Technology sector, focusing on stocks such as Grab, Cognizant, and International Business Machines. According to TipRanks, Mittal has an average return of 23.7% and a 78.32% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $95.00 price target.