Cognizant’s Growth Outlook Dims Amid Macroeconomic Challenges: Hold Rating Affirmed

Cognizant (CTSH – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst James Faucette from Morgan Stanley maintained a Hold rating on the stock and has a $80.00 price target.

James Faucette has given his Hold rating due to a combination of factors impacting Cognizant’s growth outlook. The company’s bookings growth has shown signs of deceleration, which was not fully anticipated in prior estimates. This slowdown is partly attributed to broader macroeconomic volatility and geopolitical uncertainties, which have led to a downward revision of the real GDP forecast.
Despite Cognizant’s relative insulation from certain regional pressures due to its significant North American revenue base, the overall macroeconomic environment remains challenging. The tempered growth expectations for the latter half of the year, combined with updated foreign exchange figures, have led to a reduction in the company’s organic growth forecast. While margin expansion forecasts remain unchanged, the adjustments in growth estimates have resulted in a slight decrease in expected earnings per share, supporting the Hold rating.

According to TipRanks, Faucette is a 5-star analyst with an average return of 5.3% and a 63.56% success rate. Faucette covers the Technology sector, focusing on stocks such as Endava, Block, and Affirm Holdings.