Analysts at Citi upgraded shares of Cognizant (NASDAQ:CTSH) to a Buy rating (from Neutral) and raised their Price Target on the shares to $80 (from $72), noting that the company "has made considerable progress on multiple fronts."
In their latest note on the multinational IT services provider, the analysts argue that with the appointment of the new CEO Ravi Kumar S earlier this year, Cognizant's "reputation with clients as well as employees has improved," and this new image is now "leading investors to show steady, incremental interest in this idiosyncratic, self-help story."
They further note Cognizant's recent effort to "narrow the operating performance gap, both for demand- and supply-side metrics," and see "year-to-date bookings strength and improved client and employee retention as early evidence that Cognizant can keep pace with its main comps into a recovery."
Despite outperforming year-to-date, the analysts highlight that the stock "remains attractive (<14x FY24E EPS) and non-consensus (~20% of analysts have a positive view)." As such, they believe "positive changes can benefit 2024-2025," and see them helping "CTSH stock deliver an attractive return."
Citi upgrades CTSH to Buy (from Neutral), and raises the Price Target to $80 (from $72), implying nearly 25% upside from yesterday's closing price of $65.44.