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Very Overpriced on Growth Expectations: Computer Sciences Corporation (NYSE:CSC)
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We look at Computer Sciences Corporation (NYSE:CSC) [Trend Analysis] a company in the Technology industry being focused on by many investors, to assess if it provides value for investors considering buying or selling it. Currently Computer Sciences Corporation is trading at $67.66 after moving down -0.89% in the previous day of trading.
CSC is trading with a trailing 12 month P/E multiple of 57.83 and an estimated forward P/E multiple of 14.09. The stock has an estimated 5 year annual growth of 9.69% and a PEG multiple of 5.97.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Computer Sciences Corporation is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of CSC. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of CSC being 5.97, we consider Computer Sciences Corporation to likely be overpriced.
This analysis means that value buyers who do not currently hold Computer Sciences Corporation (NYSE:CSC) should not consider buying and investors currently holding the stock should consider selling.
The mean analyst 12 month target price for Computer Sciences Corporation C (NYSE:CSC) is currently $66.46 or 1.77% below the current price. Additionally, the stock has been as high as $73.29 and as low as $54.23 in the last 52 weeks. Analysts are estimating that CSC will report earnings per share of $1.08 next quarter.










