Cognizant (CTSH) – Investment Analysts’ Recent Ratings Changes

A number of research firms have changed their ratings and price targets for Cognizant (NASDAQ: CTSH):

  • 5/18/2018 – Cognizant was downgraded by analysts at BidaskClub from a “buy” rating to a “hold” rating.
  • 5/9/2018 – Cognizant was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “sell” rating. According to Zacks, “Cognizant’s first-quarter 2018 results were driven by its significant exposure to the fast-growing verticals like financial services and healthcare. The company is benefiting from domain expertise as well as its ability to harness the ongoing digital transition. It is also significantly gaining from accretive acquisitions and share repurchase program. However, the company faces significant geographic, domain and customer concentration risks which can negatively impact its business. Besides, stiff competition in the IT services market remains a concern. Further, lackluster spending by large banks in the financial services sector is a concern for the company’s top-line growth. Additionally, higher attrition rate is significant headwind. Shares have underperformed the industry on a year-to-date basis.”
  • 5/9/2018 – Cognizant was downgraded by analysts at BidaskClub from a “strong-buy” rating to a “buy” rating.
  • 5/8/2018 – Cognizant had its price target lowered by analysts at Morgan Stanley to $88.00. They now have an “equal weight” rating on the stock.
  • 5/8/2018 – Cognizant was given a new $95.00 price target on by analysts at Credit Suisse Group. They now have a “buy” rating on the stock.
  • 5/7/2018 – Cognizant was downgraded by analysts at ValuEngine from a “buy” rating to a “hold” rating.
  • 5/7/2018 – Cognizant had its “buy” rating reaffirmed by analysts at Pivotal Research. They now have a $91.00 price target on the stock. They wrote, “We keep our BUY but lower 2018 EPS to $4.48 from $4.55, and 2019 to $5.05 from $5.18. keeping the same 18x multiple lowers our PT to $91 from $93. Results by vertical, Healthcare and Products/Resources, Comm. Healthcare 29% of total revenue (HC) repeated 4Q’s strong results and was up almost 12% YY. Products/Resources, 21% of total, was up 11%, and Comm/Media/Tech at 13% of sales was up 18%. For CTSH’s largest category, being Financial Services (37% of rev) was up 6%, reginal banks and insurance were up double digits, but large money center banks dragged down results, as has been the case. Money center banks are spending on Digital but cutting spending when possible in ‘running’ the business. The new tax laws allowed the company repatriate $2b from overseas and $500m was used to acquire Bolder Healthcare. The company continues to pursue smaller acquisitions. Digital mix continues to improve and is now 29% revenue.””
  • 5/1/2018 – Cognizant was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $92.00 price target on the stock. According to Zacks, “Cognizant's growth can be attributed to its significant exposure to the fast-growing verticals like financial services and healthcare. Higher demand from payer and top-tier consulting clients in the healthcare segment will help to sustain the growth momentum. Cognizant is benefiting from domain expertise as well as its ability to harness the ongoing digital transition. The company is also significantly gaining from accretive acquisitions and share repurchase program. In the past year, Cognizant shares have outperformed the industry it belongs to. Estimates have been stable lately ahead of the company’s Q1 earnings release. However, the company faces significant geographic, domain and customer concentration risks which can negatively impact its business. Besides, stiff competition in the IT services market remains a concern.”
  • 4/11/2018 – Cognizant was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “Cognizant's growth can be attributed to its significant exposure to the fast-growing verticals like financial services and healthcare. Higher demand from payer and top-tier consulting clients in the healthcare segment will help to sustain the growth momentum. Cognizant is benefiting from domain expertise as well as its ability to harness the ongoing digital transition. The company is also significantly gaining from accretive acquisitions and share repurchase program. In the past year, Cognizant shares have outperformed the industry it belongs to. Estimates have been stable lately ahead of the company’s Q1 earnings release. However, the company faces significant geographic, domain and customer concentration risks which can negatively impact its business. Besides, stiff competition in the IT services market remains a concern. The company has mixed record of earnings surprises in recent quarters. “
  • 3/28/2018 – Cognizant is now covered by analysts at Sanford C. Bernstein. They set a “market perform” rating and a $57.50 price target on the stock.

Cognizant opened at $75.78 on Friday, Marketbeat Ratings reports. The company has a debt-to-equity ratio of 0.06, a current ratio of 3.64 and a quick ratio of 3.64. Cognizant has a fifty-two week low of $75.39 and a fifty-two week high of $75.87. The company has a market capitalization of $44.17 billion, a P/E ratio of 21.47, a P/E/G ratio of 1.43 and a beta of 1.07.

Cognizant (NASDAQ:CTSH) last posted its quarterly earnings data on Monday, May 7th. The information technology service provider reported $1.06 earnings per share for the quarter, hitting the consensus estimate of $1.06. Cognizant had a net margin of 9.67% and a return on equity of 20.48%. The firm had revenue of $3.91 billion during the quarter, compared to analysts’ expectations of $3.90 billion. During the same quarter in the previous year, the company posted $0.84 EPS. Cognizant’s revenue was up 10.3% on a year-over-year basis. sell-side analysts forecast that Cognizant will post 4.17 EPS for the current fiscal year.

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, May 31st. Investors of record on Tuesday, May 22nd will be given a $0.20 dividend. This represents a $0.80 annualized dividend and a yield of 1.06%. The ex-dividend date of this dividend is Monday, May 21st. Cognizant’s dividend payout ratio (DPR) is presently 22.66%.

In other Cognizant news, VP Malcolm Frank sold 1,091 shares of the company’s stock in a transaction on Monday, March 5th. The shares were sold at an average price of $82.11, for a total transaction of $89,582.01. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CFO Karen Mcloughlin sold 1,791 shares of the company’s stock in a transaction on Thursday, March 15th. The shares were sold at an average price of $83.76, for a total transaction of $150,014.16. Following the sale, the chief financial officer now owns 42,718 shares of the company’s stock, valued at approximately $3,578,059.68. The disclosure for this sale can be found here. Insiders sold a total of 44,684 shares of company stock valued at $3,700,068 in the last 90 days. 0.60% of the stock is currently owned by corporate insiders.

Several institutional investors have recently modified their holdings of CTSH. BlackRock Inc. raised its position in shares of Cognizant by 10.9% during the 1st quarter. BlackRock Inc. now owns 40,069,496 shares of the information technology service provider’s stock valued at $3,225,593,000 after acquiring an additional 3,948,014 shares during the last quarter. Arrowstreet Capital Limited Partnership raised its position in shares of Cognizant by 296.7% during the 4th quarter. Arrowstreet Capital Limited Partnership now owns 4,422,593 shares of the information technology service provider’s stock valued at $314,093,000 after acquiring an additional 3,307,799 shares during the last quarter. Winslow Capital Management LLC bought a new stake in shares of Cognizant during the 4th quarter valued at $217,524,000. APG Asset Management N.V. raised its position in shares of Cognizant by 241.2% during the 4th quarter. APG Asset Management N.V. now owns 3,580,820 shares of the information technology service provider’s stock valued at $211,784,000 after acquiring an additional 2,531,494 shares during the last quarter. Finally, Genesis Asset Managers LLP increased its position in shares of Cognizant by 92.3% in the 4th quarter. Genesis Asset Managers LLP now owns 3,738,507 shares of the information technology service provider’s stock valued at $265,509,000 after buying an additional 1,794,164 shares in the last quarter. Institutional investors own 88.74% of the company’s stock.

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide. The company operates through four segments: Financial Services; Healthcare; Products and Resources; and Communications, Media and Technology. It offers business, process, operations, and technology consulting services; application design and development, and systems integration services; application testing, consulting, and engineering services; and enterprise information management services.

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