BofA Lowers Target on Cognizant to $77 on Legislative Uncertainty

Bank of America lowered its price target on Cognizant Technology Solutions

from $90 to $77 in a research note from Wednesday morning. Analyst Sara Gubins attributed the reduced target to uncertainty surrounding the immigration reform legislature currently in the Senate. She believes the legislation could potentially cut Cognizant's margin by approximately 380 basis points, or 20 percent of the company's 2017 estimated EPS. Gubins previous estimates placed the cut around 12 percent of estimated EPS. Gubins was positive on near-term demand for Cognizant, but warned of likely downside even if immigration reform never occurs. With shares of Cognizant trading up 0.6 percent to $64.45 despite the BofA note, Gubins new price target still impiles potential upside of about 19 percent.