Cognizant Rises on Upbeat Analyst Note
Tuesday August 15, 2:34 pm ET
Cognizant Rises Sharply, Credit Suisse Initiates With Bullish Rating
NEW YORK (AP) -- Credit Suisse initiated coverage of Cognizant Technology Solutions Corp. with a bullish rating, saying the outsourcing services provider's focus on growing revenue will give it the scale to fend off competitors.
"Management focused on revenue growth, while managing margins in a tight band," wrote analyst Bhuvnesh Singh in a note to investors Tuesday. "This yielded dividends in terms of scale so that it now ranks among the top five players in the Indian IT industry."
Cognizant provides application maintenance services, data warehousing and software development primarily for North American companies, but the bulk of its development facilities and staff are based in India.
Cognizant shares gained $2.26, or 3.4 percent, to $68.95 in recent trading on the Nasdaq. The stock has traded between $42.25 and $71.99 during the past 52 weeks, and is up 43 percent since the start of the year. It hit its 12-month peak of $71.99 on Aug. 4.
"We believe Cognizant should continue to outpace its peers due to its superior growth potential, better-insulated margins and potential to upside numbers," the analyst wrote.
Singh started the company with an "Outperform" rating and set a target share price of $80.
On Aug. 2, Cognizant, based in Teaneck, N.J., reported a 53 percent jump in second-quarter earnings and raised its full-year earnings guidance, as sales rose 59 percent. |
