UPDATE: Credit Suisse Initiates Coverage on Cognizant Technology Solutions with Neutral Rating, $75 PT

In a report published Friday, Credit Suisse initiated coverage on Cognizant Technology Solutions Corp.

with a Neutral rating and $75.00 price target. Credit Suisse noted, “Over 50% of CTSH's business is application development work, which we view as more discretionary in nature. Furthermore, ~41% of company revenue is derived from the Financial Services vertical. Given the headwinds of this industry, we believe that it is prudent to remain on the sidelines near-term. Longer term, we believe deceleration in growth is a risk to the current multiple. The stock currently trades at 17.5x our 2013 EPS estimate. While this is below the stock's historical ten- and five-year averages, we think it is reasonable given less visibility around discretionary IT spending, especially in the Financial vertical. We note that in the rare event of a miss by CTSH relative to expectations, the stock trades off meaningfully. That being said, we think the company will continue to deliver industry-leading growth.” Cognizant Technology Solutions Corp. closed on Thursday at $70.04.