Update shared on 15 Dec 2025
Fair value Decreased 15%Analysts have reduced their price target on DXC Technology from 18.88 dollars to 16.00 dollars, citing a higher required return and a lower valuation multiple, despite improving revenue contraction and relatively stable profit margins.
What's in the News
- Launched AdvisoryX, a global advisory and consulting group focused on AI strategy, operating models, and governance, supported by a new global AI readiness study that highlights a large execution gap at enterprises (company announcement).
- Introduced DXC Assure Smart Apps, an AI powered suite of workflow applications that integrate with insurers' core systems to modernize operations, enhance self service, and cut process design time by about 80 percent (company announcement).
- Reached a key migration milestone with ivari, moving about 732,000 life insurance policies to the DXC Assure Platform on AWS, reducing operating costs by 22 percent and enabling faster product launches (client announcement at AWS re:Invent).
- Won a 7+1+1 year Master Vendor contract with the Metropolitan Police Service to deliver BPO services and replace ERP and resource management systems, aimed at improving real time data use, efficiency, and frontline support (public sector contract announcement).
- Completed repurchase of 27,027,268 shares, about 14.11 percent of shares outstanding, for $533.07 million under its ongoing buyback program announced in May 2023 (buyback update).
Valuation Changes
- Fair Value: reduced from $18.88 to $16.00, a moderate downward revision in the estimated intrinsic value per share.
- Discount Rate: increased from 11.6 percent to 12.5 percent, reflecting a slightly higher required return and risk premium.
- Revenue Growth: improved from about minus 4.44 percent to about minus 1.12 percent year over year, indicating a significant easing in expected revenue contraction.
- Net Profit Margin: nudged down from about 2.18 percent to about 2.01 percent, a slight deterioration in expected profitability.
- Future P/E: lowered from 19.64x to 14.20x, a substantial compression in the valuation multiple applied to forward earnings.
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