UPDATE: Deutsche Bank Downgrades Computer Sciences Corporation to Hold, Lowers PT Following Weaker 4Q Revenues

In a report published Thursday, Deutsche Bank analyst Bryan Keane downgraded the rating on Computer Sciences Corporation

from Buy to Hold, and lowered the price target from $53.00 to $47.00. In the report, Keane noted, “CSC posted 4Q revs of $3,697m (-7.3% Y/Y, -7.0% cc), below our $3,833m est (included $45m in divestiture revs) and pro forma EPS of $0.55 (includes $0.72 of restructuring) or ex-items was $1.27 vs our $0.94 est. Despite $500m of cost takeout in 4Q13 ($200m higher than expected), there was no corresponding uptick in op income due to a rise in investments. With lower-than-expected FY14 cost takeout (~$400m vs. our est of $500m) and higher investments ($300m vs. our est of $250m), we see less room for error and fewer margin expansion opportunities. D/G to Hold, cut TP to $47, and lower FY14 & FY15 EPS $0.16 & $0.08 to $3.47 & $4.20, resp.” Computer Sciences Corporation closed on Wednesday at $44.71.