UBS Maintains Sapient (SAPE) Sell Rating But Raises Target Price
UBS analyst Jason Kupferberg maintained his Sell rating for shares of Sapient Corporation (Nasdaq: SAPE) and raised the price target from $7 to $7.50.
"SAPE indicated a non-GAAP oper margin target of 13-16% for full year ‘11. SAPE has set this target in the past and came up short. While we admire the overall pattern of execution over the past couple of years, we are still somewhat skeptical that this margin range can be achieved next year on the basis of improved effective utilization, project delivery, pricing, and G&A efficiencies. If SAPE can deliver 13-16% margins in ‘11, we believe this would trigger multiple expansion."
Kupferberg wrote that Sapient Corporation shares were expensive and didn't deserve the premium they held over a similar stock, Cognizant Technology Solutions (Nasdaq: CTSH), that had better margins and organic growth than Sapient Corporation.
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