Cognizant Technology (CTSH) Stock Price Target Hiked at Nomura

NEW YORK (TheStreet) -- Shares of Cognizant Technology Solutions (CTSH) - Get Report are up by 0.36% to $60.77 on Monday afternoon, as the company's price target was increased to $67 from $65 at Nomura.

The firm reiterated its "buy" rating and increased the stock's price target early this morning after the Teaneck, NJ-based provider of information technology reported solid 2016 first quarter results on May 6. Cognizant showed "promising outlook" for 2017's year-over-year revenue growth, while the remainder of 2016's sales should persist moderately, Nomura stated in an investor note.

Cognizant reported first quarter earnings of 80 cents per diluted share, higher than analysts' expectations of 79 cents per diluted share and 2015 first quarter earnings of 71 cents per diluted share. The company reported 2016 first quarter revenue of $3.2 billion, up 10% year-over-year from $2.9 billion but slightly below analysts' expectations of $3.23 billion.

The missed revenue expectation is partially due to Cognizant's cautious full-year view on banking, financial services and insurance (BFSI). It also reflects timing issues with Business Process-as-a-Service (BPaaS) deal closures and large healthcare mergers, which caused deferrals, according to Nomura analysts who predict better momentum from these projects in 2017.

For the current quarter ending in July, Cognizant expects to report earnings ranging between 80 cents and 82 cents per share and revenue in the range of $3.34 billion to $3.4 billion.

"Second quarter guidance fears did not play out with the company, guiding for the highest historical incremental revenue addition," Nomura analysts said.

Separately, TheStreet Ratings rated Cognizant Tech Solutions as a "buy" with a score of B+.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon.

Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

This is driven by a number of strengths, which TheStreet Ratings believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks covered.

The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, growth in earnings per share and increase in net income. TheStreet Ratings feels its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

You can view the full analysis from the report here: CTSH