Bank of America Securities analyst Jason Kupferberg has maintained their neutral stance on CTSH stock, giving a Hold rating on February 7.
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Jason Kupferberg has given his Hold rating due to a combination of factors including Cognizant’s ongoing efforts to stabilize and grow its business under the leadership of CEO Ravi Kumar. The company is focused on returning to high growth by leveraging AI advancements and improving discretionary spending, but there remains some uncertainty about its post-2025 organic growth rate. While there are positive signs of improvement in discretionary spending in key sectors like Financial Services and Healthcare, the overall demand environment remains uncertain, which contributes to the balanced risk/reward outlook.
Additionally, Cognizant’s initiatives in AI/GenAI, such as increasing AI-generated code and progressing towards outcome-based pricing models, are promising for future productivity gains. However, the current valuation of Cognizant shares, trading at approximately 17.5x the projected 2025 earnings, suggests a balanced risk/reward scenario, prompting the Hold rating. The company’s commitment to strategic acquisitions and maintaining stable pricing also plays a role in this cautious yet optimistic outlook.
In another report released on February 7, Mizuho Securities also maintained a Hold rating on the stock with a $87.00 price target.