Shares of DXC Technology, (DXC) - Get Report the provider of consulting and outsourcing services, jumped on Wednesday after analysts at Wells Fargo upgraded the stock to overweight from equal weight on valuation.
The firm affirmed a $48 price target on the Tysons, Va., company, which trades at a discounted valuation, according to analyst Timothy Willi.
And the investment firm is bullish on DXC's management.
DXC is now "in a position where favorable external demand dynamics and improved internal execution (culture/operations) should enable the company to begin to move towards sustainable revenue/earnings per share growth," Willi said.
DXC has also improved its balance sheet, which could lead to accretive M&A and/or share buybacks, Wells Fargo said.
The shares are up nearly 60% year to date. At last check they were 4.6% higher at $39.87.
Last week, the company reported fiscal-fourth-quarter earnings of 74 cents a share as revenue declined 9% to $4.4 billion. Both results topped analyst estimates for the quarter.
For the year DXC expects revenue between $16.6 billion and $16.8 billion. Analysts are expecting revenue of $16.76 billion.
The stock jumped in January after French tech-services provider Atos SE had proposed to acquire the company.
Reuters, citing sources with knowledge of the matter, reported that Atos made a formal approach to DXC about a potential takeover valuing the company at more than $10 billion including debt.
DXC, employing 138,000, provides analytics, cloud, security and business process services to clients in the insurance, automotive, aerospace and defense industries.