J.P. Morgan Reviews CSC's 10-K Submission

J.P. Morgan is maintaining its Neutral rating on Computer Sciences Corp. CSC in light of the company's submission of its FY11 Form 10-K last evening. According to J.P. Morgan, “Last evening, CSC filed its FY11 Form 10-K (despite some fears that it might miss this target date), sharing more disclosures on the range of challenges it faces. While we were encouraged with the level of disclosures, we retain our negative bias on the stock given the significant and material business, legal, and political risks which, even in the most benign case, could require much of management's time and effort in FY12. While the company appears to have made solid headways in improving its internal controls, the on-going SEC and audit committee investigations will keep the accounting overhang low over the near term. Moreover, the NHS uncertainty coupled with the upcoming acquisition of iSoft further cloud the outlook. We remain Neutral as we believe cheap valuation and a potential of higher buybacks/dividends could keep value investors interested.” CSC closed yesterday at $38.20.