- Analysts cut their price targets on DXC Technology Co (NYSE:DXC) post Q4 earnings miss.
- RBC Capital analyst Daniel Perlin reiterated DXC with an Outperform and lowered the price target from $47 to $39 (17.9% upside).
- While Q4/22 results were lower than expected and FY23 guidance is light, Perlin believes DXC is generally progressing toward a more digitally focused, consistent and transparent operator.
- The Outperform rating is based on: 1) management achieving its financial targets as it executes its strategic plan; 2) DXC evolving into an at-scale digital/new technology player, which should help offset declines in traditional solutions; and 3) an attractive valuation relative to peers.
- BMO Capital analyst Keith Bachman maintained DXC with an Outperform and lowered the price target from $38 to $37 (11.8% upside).
- DXC’s quarter and FY24 guidance have many moving parts, including the impact from Russia/Ukraine, FX, and dispositions.
- Organic revenue growth missed the mid-point of guidance normalized though FCF was better.
- Bachman was a tad disappointed with the rev and FCF guide for FY23 though DXC beat the original FY22 FCF guidance by ~50%.
- Hence, Bachman thinks the FY23 FCF guidance and FY24 targets remain attainable, though unlikely to be achieved linearly.
- Price Action: DXC shares traded higher by 13.6% at $33.44 on the last check Thursday.
