Syntel, Inc. SYNT's decision to give shareholders a one-time special dividend of $15 per share by repatriating cash held by its foreign subsidies isn't enough to turn Joseph Foresi of Cantor Fitzgerald bullish. Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
In a research report on Tuesday, Foresi noted that Syntel will repatriate approximately $1.24 billion in cash and will incur a one-time tax expense of $264 million.
The company also lowered its earnings guidance to reflect the charge and costs for the special dividend. Specifically, the company's project earnings per share range is ($0.60) to ($0.75) from a prior $2.55 to $2.70. Accordingly, the analyst lowered his third-quarter earnings per share estimate from $0.62 to ($2.60) but maintains his revenue estimate of $245.20 million.
Foresi continued that his Hold rating, which he reiterated, is based on the fact that he is looking for a catalyst to drive revenue growth above industry rates.
Looking forward, the analyst also lowered his 2017 earnings per share estimate to $2.56 from $2.70 due to a "projected reduction in annual other income." Nevertheless, his $43 price target remains unchanged and his based on a 17x multiple to his 2017 earnings per share estimate.
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