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Technology Stocks : DXC - DXC Technology -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (6)	6/2/2018 7:37:25 PM
From: Lynn	Respond to of 10

Another easier to read report from Morgan Stanley's web site. Basically, Overweighed, Industry Attractive, price target $114.00 [closing price 1 June 2018 = $83.40]. Sell off of DXC lately due to shareholder confusion over the PRSP spin-off. I admit to being a confused shareholder, but I have not sold: DXC Technology Company DXC Sell-off Looks Overdone We are buyers of DXC and see meaningful opportunity for upside following a sell-off in the stock driven by investor confusion around the mechanics of the USPS spin and guidance offered on the call. Reiterating our $114 PT and Overweight rating. USPS spin driving confusion. DXC continued to sell off yesterday after trading off on substantial volume before the holiday weekend. Including today's performance, the stock closed 10% lower than just prior to the earnings call (Thursday). However, we believe the sell-off is overdone considering investor confusion evident by questions that we have fielded over the past few days. As a result, we continue to see potential for upside with the when issued stock (excluding USPS) trading at approximately 8.1x our FY20 EPS estimate (March year-end) and 5.6x EV/EBITDA on our FY19 numbers. Our $114 price target for the consolidated company (including the rights to PRSP) implies 27% upside from yesterday's closing price for DXC. The following addresses several of the most frequent topics we have discussed with investors over the past few days: DXC Technology Company ( DXC.N, DXC US ) Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. Guidance excludes USPS. Some estimates and price targets appear to include a mix of consolidated and stand alone estimates. Company's FY19 guidance was for the stand alone DXC business. The two months of USPS operations ending May 2018 will be accounted for in discontinued operations for 1Q19. Owners of DXC today will receive shares of PRSP. As indicated below, through May 31, DXC shareholders will receive one share of PRSP for every two shares of DXC. PRSP 'when issued' stock closed yesterday at approximately $25.90 per share. This implies approximately $12.95 per share of additional value for current DXC shareholders driven by operations not accounted for in our model.