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Falling Earnings Estimates Signal Weakness Ahead for DXC Technology (DXC)

Zacks Equity Research
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JD.com, Inc. (JD) Dips More Than Broader Markets: What You Should Know

In the latest trading session, JD.com, Inc. (JD) closed at $24.14, marking a -1.27% move from the previous day.

Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.

One such stock that you may want to consider dropping is DXC Technology Company DXC, which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in DXC.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 10 estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $9.04 a share a month ago to its current level of $8.18.

Also, for the current quarter, DXC Technology has seen five downward estimate revisions versus no revisions in the opposite direction, dragging the consensus estimate down to $1.74 a share from $1.98 over the past 30 days.  

The stock also has seen some pretty dismal trading lately, as the share price has dropped 18.1% in the past month.

DXC Technology Company. Price and Consensus

DXC Technology Company. Price and Consensus | DXC Technology Company. Quote

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the Computers - IT Services industry, you may instead consider a better-ranked stock - Amdocs Limited DOX. The stock currently holds a Zacks Rank #2 (Buy) and may be a better selection at this time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Amdocs Limited (DOX) : Free Stock Analysis Report
 
DXC Technology Company. (DXC) : Free Stock Analysis Report
 
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