Morgan Stanley Lowers DXC Technology Target Price to $15, Maintains Equal Weight Rating

Morgan Stanley has reduced its price target for DXC Technology to $15 from $16 while maintaining an Equal Weight rating. The decision follows the company's Q1 performance, which exceeded expectations and reinforces its confidence in DXC's ability to achieve its growth objectives by fiscal 2026. DXC Technology is a vendor-independent IT services provider with a market capitalization of approximately $2.34 billion. Its financial health presents a mixed picture, with revenue growth concerns and potential strengths in profitability margins and balance sheet strength.

Title: Morgan Stanley Adjusts Price Target for DXC Technology

Morgan Stanley has recently reduced its price target for DXC Technology (NYSE:DXC) to $15 from $16 while maintaining an Equal Weight rating. This adjustment follows the company's Q1 performance, which exceeded expectations, reinforcing the firm's confidence in DXC's ability to achieve its growth objectives by fiscal 2026. DXC Technology is a vendor-independent IT services provider with a market capitalization of approximately $2.34 billion. The company's financial health presents a mixed picture, with concerns regarding revenue growth and potential strengths in profitability margins and balance sheet strength.

DXC Technology reported its first-quarter fiscal year 2026 results on July 31, 2025. The company's total revenue was $3.16 billion, down 2.4% year-over-year (down 4.3% on an organic basis) [2]. The adjusted EBIT margin was 6.8%, and the non-GAAP diluted earnings per share was $0.68, down 9.3% year-over-year. The company's bookings of $2.8 billion increased by 14% year-over-year. The company also repurchased $50 million of shares.

The company's revenue growth concerns are reflected in the adjusted EBIT margin, which was down 3.6% year-over-year. However, the company's profitability margins and balance sheet strength present potential strengths. The company's quick ratio and current ratio are both 1.22, indicating strong liquidity. The debt-to-equity ratio of 0.86 also suggests a healthy balance sheet.

Morgan Stanley's decision to reduce the price target reflects the company's mixed financial performance. The company's Q1 results exceeded expectations, but the reduction in revenue growth and profitability margins have led to a cautious outlook. The firm's confidence in the company's ability to achieve its growth objectives by fiscal 2026 is reflected in the Equal Weight rating.

Investors should closely monitor DXC Technology's performance in the coming quarters to assess the validity of Morgan Stanley's price target. The company's ability to achieve its growth objectives and maintain profitability margins will be key factors in determining its long-term success.

References
[1] https://www.marketbeat.com/instant-alerts/dxc-technology-nysedxc-updates-q2-2026-earnings-guidance-2025-07-31/
[2] https://www.morningstar.com/news/pr-newswire/20250731to42014/dxc-technology-reports-first-quarter-fiscal-year-2026-results