03:25 PM EDT, 08/28/2024 (MT Newswires) -- Cognizant Technology Solutions' ( CTSH ) acquisition of Belcan strategically improves its service offerings while diversifying its client base beyond healthcare and financial services, RBC Capital Markets said in a note emailed Wednesday.

"With the close of the Belcan acquisition and the corresponding change in management's guidance, we are now incorporating it into our model and, therefore, increasing our revenue estimates but reducing our [earnings per share] estimates to reflect near-term margin dilution and the cost of the deployed capital," RBC said.

RBC raised its 2024 and 2025 revenue estimates on Cognizant to $19.68 billion and $20.79 billion, from $19.42 billion and $19.93 billion, respectively, while lowering its EPS estimates to $4.59 and $4.80 from $4.67 and $4.90, the note said.

The acquisition of Belcan also boosts Cognizant's exposure to aerospace and defense and positions it to capitalize on the engineering research and development, or ER&D, market, RBC said.

RBC maintained a sector perform rating on the company's stock and raised its price target to $82 from $81.

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