(By Balaseshan) Deutsche Bank (DB) lowered its price target on shares of Cognizant Technology Solutions Corp. (NASDAQ:CTSH) to $80 from $85, while maintaining its "Buy" rating.
After the company's first quarter results, the brokerage reduced its 2012 EPS estimate by $0.08 to $3.36 and its 2013 estimate by $0.19 to $3.94.
CTSH posted 1Q revenue of $1.711 billion (up 2.9% sequential), above DB's estimate of $1.703 billion (up 2.3% sequential), and EPS of $0.79 beat its estimate by $0.01.
However, as the brokerage was worried about in its preview, 2Q-2012 guidance came in below normal seasonality at up 4.6% sequential, which CTSH expects to carry through to 3Q and 4Q (acceleration in late March and early April less than expected) in light of clients' underspending thus far (notably in pharma and banking).
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Expecting no 2012 discretionary spend pickup, CTSH lowered its 2012 revenue guidance 3 points to at least 20% year-over-year.
Cognizant is a provider of custom information technology, consulting and business process outsourcing services. It operates in four segments: Financial Services; Healthcare; Manufacturing, Retail and Logistics; and Other, which includes communications, information, media and entertainment, and high technology.
CTSH is trading up 5.75% at $59.54 on Tuesday.