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Cognizant Off 5%: Bulls Delighted with Margins; Big Banks Still a Drag

Cowen & Co. ’s Bryan Bergin, reiterating his Outperform rating, and $80 price target, notes the margin was above his own estimate for 19.6%.

Second, we believe investor appetite for a large-cap capital return story in the IT space is high, especially after the successful investment profile of Accenture, which is up 21% year-to-date.

As seen in the exhibit below, Cognizant’s operating model has become similar to Accenture’s given its new focus on the shift to Digital, margin expansion, and capital returns.

Third, a combination of continued efforts on the digital front, industry dynamics as traditional IT services witness some relief, and diminishing concerns about the risk associated with Brexit leave us confident that there are multiple positive tailwinds for the company.

In a phone call this morning, CEO Francisco D’Souza talked with me about the company’s ongoing push to make more business in “digital transformation,” an initiative that came out of the company’s face-off with activist firm Elliott Management at the beginning of the year , and that resulted in Cognizant vowing to pursue more high-margin projects.a

READ MORE (Barron's)

  • Cognizant revenues rise 9.1%The Hindu
  • Cognizant's revenue at $3.77 billion; up 9.1% YoYTimes of India
  • Cognizant posts strong Q3 results, revenues grow 9.1%Times of India
  • Cognizant Q3 net up 11%, eyes 9.5-10% revenue growth in
  • Cognizant ups 2017 guidance on stronger growth for digital businessBusiness Standard
  • Cognizant Sees Q4 Profit Below Market View; Lifts FY17 Forecast - Quick FactsNasdaq
  • Earnings Reaction History: Cognizant Technology Solutions Corporation, 33.3 ...Nasdaq
  • Cognizant beats earnings estimates on digital services strengthTimes of India
  • What Will Happen to Cognizant Technology Solutions Corp (CTSH) Next? The Stock ...BZ Weekly

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Cognizant Off 5%: Bulls Delighted with Margins; Big Banks Still a Drag


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