Computer Sciences Corp. (CSC) is one of the leading players in the information technology (IT) services industry. CSC reported mediocre fourth quarter 2011 results. We are apprehensive about the intense competition in the IT and cloud computing space from both small and big players such as Accenture and Hewlett-Packard.
Moreover, with government orders expected to dry up to a certain extent and the NHS realization getting pushed to future quarters, things look difficult for Computer Sciences. Moreover, demand for the company's products in Europe is not encouraging for the upcoming quarters.
We have an Underperform rating on the company. We set a price target of $40.00, representing a P/E of 7.8x our 2012 EPS estimate.
Be the first to comment