Jefferies has reduced its price target on Cognizant Technology Solutions (NASDAQ:CTSH) to $90.00 from $100.00, yet the research house kept a Buy rating on the IT services provider.
The analyst move accompanies a small upward revision to Jefferies' 2026 adjusted EPS estimate - an increase of $0.03 to $5.72 - after Cognizant posted quarterly results and issued 2026 guidance that exceeded expectations. Despite that modest earnings upgrade, Jefferies trimmed the target price, pointing to factors beyond near-term financials.
Central to Jefferies' rationale is investor anxiety about the risk of artificial intelligence disintermediating parts of traditional IT services. The firm highlighted that these concerns are weighing on Cognizant's valuation in the market. That perspective is at odds with the company's management, which has characterized the acceleration in agentic capabilities among frontier AI models as an emerging tailwind for the business.
Jefferies acknowledged the unresolved nature of the debate over how AI will affect Cognizant's business model, noting it is unlikely to reach a clear conclusion in the near term. Even so, the firm reiterated its Buy recommendation, signaling confidence that long-term shareholders could benefit from Cognizant's positioning despite current valuation headwinds.
On the company's most recent quarterly results, Cognizant reported fourth-quarter 2025 earnings per share of $1.35, beating the consensus estimate of $1.32. Revenue for the quarter was $5.3 billion, marginally below the expected $5.31 billion. That small revenue shortfall prompted some investor concern, even as the EPS beat underscored continuing earnings resilience.
The company did not report any major mergers or acquisitions in the recent updates, and the latest developments did not include any analyst upgrades or downgrades. Those omissions leave the market to weigh the mixed signals from earnings growth and slightly softer-than-expected top-line performance alongside the broader AI valuation debate.
What this means
- Jefferies lowered its price target to $90 but retained a Buy rating on CTSH.
- The firm raised its 2026 adjusted EPS forecast to $5.72, a $0.03 lift.
- Cognizant reported Q4 2025 EPS of $1.35 and revenue of $5.3 billion, missing revenue estimates by $0.01 billion.