CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
We cut our price target to $7 from $11, 3x our FY 27 (Mar.) EPS view, a deep discount to peers on DXC's high leverage and sales declines and below its three-year average (~5.6x) on elevated macro uncertainty and rising AI competition. We lower our FY 27 view by $0.63 to $2.43 and set FY 28 at $2.28. We see DXC as far behind peers competitively, demonstrated most clearly in Q4 FY 26 via (1) a 13.5% Y/Y bookings decline, similar to recent weakness, (2) a lower than expected win-rate during the quarter(32%) for DXC's $2B large deal pipeline, and (3) a 9% guidance miss for FY 27 FCF (~$600M, down 16% Y/Y). We expect an uncertain macro throughout FY 27 to continue extending client decision making timelines, especially in Europe and the U.K. (49% of Q4 sales combined) as the war in Iran brings higher energy prices, further pressuring bookings. DXC's AI products do not appear to be gaining traction at peers' rates, making the company look more vulnerable to fears of AI-based competition in the services space.