Smith Barney Downgrades Convergys to 'In-Line'
Analyst Thomas Vincent thinks rival Amdocs will capture a Sprint PCS contract that expires next year
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Smith Barney Citigroup downgraded Convergys (CVG ) to in-line from outperform.
Analyst Thomas Vincent says his downgrade of this telecom services provider is due to the news that Convergys expects to lose an outsourced billing contract from Sprint PCS once it expires at the end of 2004. He notes management indicated the 2004 contractual minimum is $40 million, which is below his $50 million to $75 million estimate. He cut the $1.37 2004 earnings per share estimate to $1.26, and cut the $18 target to $17. He thinks Convergys' stock is fairly valued.