On Thursday, JPMorgan adjusted its outlook on Cognizant Technology Solutions (NASDAQ:CTSH), increasing the stock's price target to $82.00 from the previous $74.00. The firm retained a Neutral rating on the shares.
The adjustment comes in response to Cognizant's second-quarter earnings, which exceeded expectations, and the company's guidance indicating continued revenue growth into the third quarter.
Cognizant's recent financial performance has been bolstered by the successful execution of large deals, which have contributed to the revenue boost. Furthermore, the company has adjusted its full-year 2024 growth guidance upwards, suggesting that the targets are not only attainable but also have the potential for further upside. This projection is made more promising with the impending acquisition of Belcan, which is expected to be integrated into Cognizant's operations.
The analysis acknowledged the progress Cognizant has made under the leadership of CEO Ravi Kumar. However, it also noted that the company still faces challenges in consistently achieving growth rates comparable to its peers and in realizing margin expansion. For instance, competitor Infosys (NS:INFY) has indicated higher sequential growth, highlighting the competitive landscape Cognizant operates in.
In other recent news, Cognizant Technology Solutions has been making strategic moves in the market. The company's second-quarter earnings surpassed expectations, leading JPMorgan to increase its price target from $74.00 to $82.00, while maintaining a neutral rating. This positive adjustment was influenced by Cognizant's strong revenue growth and the anticipation of its continued success into the third quarter.
In addition, Cognizant has entered into a five-year strategic collaboration with Victory Capital Holdings (NASDAQ:VCTR), aiming to enhance the firm's digital transformation efforts. The company has also expanded its partnership with Cengage Group, offering comprehensive technology services to support Cengage's ongoing digital transition.
On another front, Cognizant has settled a lawsuit involving its CFO, Jatin Dalal, and his former employer, Wipro (NYSE:WIT) Limited, with a payment of $505,087. This resolution allows Cognizant and Mr. Dalal to move forward without the overhang of litigation.
Furthermore, Cognizant has announced the appointment of Karima Silvent as a new independent director to its Board, expanding it to 13 directors. Analyst firms, including Goldman Sachs, BofA Securities, and BMO Capital Markets, have provided mixed reviews on Cognizant's recent developments and future expectations.
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