DXC Technology shares fell -4.4% Thursday, following a price target cut from a Wells Fargo Securities analyst.
Analyst Ed Caso lowered his price target for the information technology company to $32 from $46 a share. Caso indicated that the recent “unexpected and abrupt” stepping down of DXC Technology CEO Mike Lawrie and the immediate shift to new CEO Mike Salvino was followed by the decision of cutting the price target on the shares. Caso also seemed concerned about a potential volatility in DXC stock price around current levels, notwithstanding current valuation levels.
According to Caso, investors are increasingly concerned as to whether the company would be able to boost organic growth without meaningfully reducing the EBITDA margin outlook. "We think under-investment by the prior CEO will make this effort challenging," the analyst noted.