Citigroup: Cosnizant Has Expectations For Continued Growth

Citigroup released a research report on Cognizant

rating Cognizant as Medium Risk based on the expectations for continued growth at a faster rate than the rest of the industry. In the report Citigroup writes, “Our P/Ebased model yields an implied $81 (rounded) valuation based on our 28x-29x target multiple range applied to our 2011 GAAP EPS estimate of $2.80. CTSH recently traded at a cash-adjusted 2010 P/E of 29x based on 2010 EPS of $2.37, so we believe a 28x- 29x 2011 multiple is appropriate. As further support, CTSH should grow pre-tax income by an average of 28% over the next two years, so a multiple in line with growth rate is a reasonable in our opinion.” Citigroup has a Buy rating and a price target of $88.00 on Cognizant, which closed yesterday at $64.23.