SAN FRANCISCO (AP) — A Goldman Sachs analyst downgraded shares of Computer Sciences Corp. Monday, citing the government information technology contractor’s dependence on business from the Department of Defense, which may see major budget cuts in the next several years.
THE SPARK: In a client note, Goldman analyst Julio Quinteros Jr. cut his rating for the stock to “Sell” from “Neutral” and lowered his price target by $7 to $32.
THE ANALYSIS: Quinteros said checks indicate the Department of Defense is expected to see “significant budget cuts over the next few years” as a result of negotiations in Washington linked to raising the government’s debt ceiling by Aug. 2. Computer Science’s data services “appear susceptible to austerity efforts,” he said.
SHARE ACTION: Shares of Falls Church, Va.-based Computer Sciences Corp. shares fell $1.10, or 2.9 percent, to $36.83 in late trading.