- BMO analyst Keith Bachman reiterated Outperform on Cognizant Technology Solutions Corp CTSH and cut the price target from $86 to $73.
- The re-rating reflected the potential for continued margin expansion in smaller increments and an attractive valuation.
- He cut his CTSH margin and estimates for FY22 and FY23 due to the impact of FX and reduced CC organic growth.
- Incremental FX, a weaker macro, and lackluster bookings in CY22 are the drivers of his lower estimates.
- Wage inflation remains an issue, though he thinks managing headcount and revenue mix can help CTSH modestly grow margins in CY23, even from a lower revenue base.
- Price Action: CTSH shares traded lower by 1.43% at $62.12 on the last check Monday.
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