Morgan Stanley Maintains Equal-Weight on Computer Sciences Corporation (CSC)

Morgan Stanley is out with its report today on Computer Sciences Corporation CSC, maintaining Equal-weight. In a note to clients, Morgan Stanley writes, "CSC cut its F11 EPS guidance by ~9% to $4.75 from $5.20 previously, and the stock's P/E has expanded recently to 9.7x F11 consensus from ~8.8x at its lows following F3Q results. If shares dropped to trough P/E levels under 8x, CSC could fall below $40, and while possible, we don't think that is likely. While we would not be surprised to see shares take a hit on the news, based on recent valuation levels, the more reasonable downside scenario would likely be the low-to-mid- $40s range. The stock may look more compelling to value investors down there, so we will be watching near-term support levels very closely." Shares of CSC closed Monday at $50.55, down 0.84% from Friday's close.