Morgan Stanley Raises Price Target on Cognizant Stock Amid AI Strategy Focus
On July 30, Morgan Stanley analyst James Faucette raised his price target for Cognizant (CTSH) to $51. The move comes after the company's recent fiscal Q2 earnings report and amid a broader selloff in CTSH shares this year, which are down nearly 35% from their start-of-year levels. Despite the upgrade, investors remain cautious as the new price target still implies significant downside potential compared to current trading prices. Faucette cited Cognizant's differentiated AI strategy and declining inference costs as key drivers for his revised outlook. The company also reported strong contract wins in its latest quarter and raised its full-year adjusted EPS guidance, while announcing a $2 billion share buyback plan that signals management confidence. CTSH is currently trading at less than 9x forward earnings with an attractive dividend yield of 2.43%.