This tech company beat analysts’ estimates by $0.06 last quarter and Wall Street is forecasting that the company will grow at a 54.64% annual rate for the next five years.
DXC Technology Company (DXC)
From Dow Theory Forecasts
DXC Technology Company (DXC) is in the midst of reshaping its operations, spinning off its U.S. public-sector business in May and agreeing to pay $220 million for Molina Medicaid Solutions last month.
Management has hinted it has other deals in the works. DXC provides technology services, ranging from cloud infrastructure to cyber security. Encouragingly, corporate plans for IT spending remain robust in the face of a looming trade war, based on a survey of chief information officers conducted by Goldman Sachs (GS).
DXC’s return on investment climbed sharply in the 12 months ended March to reach 10%, a level enjoyed by less than 25% of stocks in our research universe. Operating profit margin has expanded in five straight quarters, and DXC has some initiatives under way that should keep lowering costs over the next 12 months.
Management expects per-share profits to rise 16% to 22% in fiscal 2019 ending March, despite
roughly flat revenue. DXC is a Focus List Buy and a Long-Term Buy.
Richard Moroney, CFA, Dow Theory Forecasts, www.dowtheory.com, 800-233-5922, July 16, 2018