Credit Suisse First Boston upgraded Computer Sciences (CSC ) to neutral.
Analyst Dris Upitis says he upgraded to neutral, from underperform on improvement in most of the company's key metrics in the second quarter. He says the 60 cents operating earnings per share is a penny above his estimates and the consensus estimates; the $3.59 billion in revenue is 2% better than his estimate.
Upitis notes stringent management of selling, general, and administrative expenses, which are down more than expected, have continued to mitigate pressure on gross margin. He also says Computer Sciences' $143 million in free cash flow is above his $118 million estimate. Upitis notes the $3.5 billion in bookings beat his $2.5 billion estimate -- owing to strength in the federal segment. He says the federal segment has a $15 billion pipeline over the next two quarters, which will rise to to $41 billion in the next 29 months.
Finally, Upitis raised his $35 target to $42.