J.P. Morgan: CTSH Sees Strong Ramp-Up In Existing Customers

The overall message in Cognizant Technology Solutions'

Form 10-K was consistent with the recent earnings call – strong growth across the board, J.P. Morgan reports. “The company is seeing strong ramp-up in its existing customers – a primary driver of its premium growth rate,” J.P. Morgan writes. “CTSH's India-based costs (and wages) increased this year, but we believe sensitivities are very manageable and lower than peers'; we see enough levers in the business model to help offset such margin pressure. “We continue to like CTSH for its attractive long-term growth potential and believe the stock is a core growth holding. CTSH remains our top ITS pick despite its premium multiple of 27x our CY11 EPS estimate vs. peers at 20x.” Cognizant Technology Solutions closed Wednesday at $73.91.