J.P. Morgan Expects Positive Stock Reaction for Computer Sciences

J.P. Morgan is out with its report on Computer Sciences CSC following CSC's board authorizing a new stock repurchase program of $1B. CSC increased its quarterly dividend by 33% from $0.15/sh, to $0.20/sh. In a note to clients, J.P. Morgan writes, "The announcement should satisfy the bulls, and we expect a positive stock reaction. With this key catalyst playing out, we see limited fundamental catalysts ahead to cure the perceived uncertainty surrounding CSC's high exposure to the public sector (more than 40% of total revenue), and expect the stock to stay relatively cheap (CY11 FCF yield of 12% vs. 4% for the group) as a result; hence our Neutral rating." CSC closed yestserday at $46.91.