Jason Kupferberg, an analyst from Bank of America Securities, maintained the Sell rating on DXC Technology (DXC – Research Report). The associated price target is $21.00.
Jason Kupferberg has given his Sell rating due to a combination of factors impacting DXC Technology’s outlook. The primary concern is the disappointing forecast for the fourth fiscal quarter revenue and adjusted earnings per share, which are projected to fall significantly below both the Bank of America estimates and the broader market consensus. Although third-quarter results exceeded expectations, this was largely due to favorable foreign exchange impacts and one-time resale revenues, rather than sustainable performance improvements. Moreover, the ongoing narrative of DXC as a company in the midst of a turnaround is fraught with uncertainty, especially with the recent appointment of a new CEO whose strategy to achieve positive revenue growth remains unclear amidst persistent structural challenges within the industry.
Additionally, the muted demand observed in the client base, particularly in the Global Business Services segment, suggests a cautious approach to revenue conversion from bookings. Despite management’s claim of a strong demand environment in several business units, the actual growth in bookings has been lackluster, with a notable year-over-year decline and a book-to-bill ratio falling below one for the first time since early fiscal 2021. Kupferberg’s assessment likely reflects these concerns along with the company’s emphasis on improving sales execution and shifting toward higher-margin services, which, while strategic, may not immediately translate into tangible financial improvements, thereby justifying the Sell rating.
According to TipRanks, Kupferberg is a 4-star analyst with an average return of 3.2% and a 56.44% success rate. Kupferberg covers the Technology sector, focusing on stocks such as Jack Henry & Associates, Toast Inc, and Accenture.
In another report released on January 24, J.P. Morgan also downgraded the stock to a Sell with a $24.00 price target.
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DXC Technology (DXC) Company Description:
DXC Technology Co. provides technology consulting, outsourcing and support services. It operates through the following segments: Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment provides technology solutions that help clients address challenges and accelerates the digital transformations that is tailored to each client’s specific objectives. The GIS segment offers to deliver predictable outcomes and measurable results, while reducing business risk and operational costs for clients. The USPS segment delivers IT services and business solutions to all levels of government in the United States. The company was founded on 19th May, 2016 and is headquartered in Tysons, VA.
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