Easing immigration reform worries seen as boost for Cognizant
Research firm Berenberg upgraded Indian IT outsourcing company Cognizant (CTSH) to Buy from Hold, saying that the stock is poised to rise because investors have become less worried about the company being hurt by immigration reform.
Noting that Cognizant’s stock has rallied recently, Berenberg analyst Georgios #Kertsos says the surge indicates that investors are less worried that Cognizant could be hurt by immigration reform. The longer it takes Congress to enact immigration reform, the better positioned Cognizant will be since it is reducing its reliance on foreign workers by hiring more employees who are already in the U.S., Kertsos added.
Meanwhile, Kertsos is upbeat about the company’s decision to expand its consulting business, saying that this strategy will increase the company’s addressable market and “drive sustainable top-line performance.” He raised his price target on the stock to $85 from $65.
LOOP MORE BULLISH TOO
On August 4, Loop Capital analyst Joseph Vafi upgraded Cognizant to Buy from Hold. “Demand headwinds” that had been hurting the company are easing, while the company “has ample room” to meet its 2019 margin target, wrote Vafi, noting that its margins are currently below those of its peers.
Easy comparisons should help the company’s earnings per share growth begin to accelerate at the end of this year, potentially enabling its multiple to rise slightly, according to the analyst. He raised his price target on Cognizant shares to $83 from $63.
In Tuesday trading, Cognizant added 0.7% to $70. Shares have a 52-week trading range of $45.44 – $71.57.
To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners. Stockwinners offers stock picks, option picks, daily stock upgrades, stock downgrades, and earnings reports that are delivered to your email.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.