Pair Trade Alert: 'Long KD Short DXC' Says JPMorgan, Here's Why
Portfolio Pulse from Surbhi Jain
JPMorgan recommends a pair trade strategy: 'Long Kyndryl (KD) / Short DXC Technology (DXC)'. Kyndryl is favored for its structural advantages and growth potential, while DXC faces growth challenges and risks.
September 06, 2024 | 7:01 pm
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JPMorgan advises a short position on DXC Technology (DXC) due to growth challenges, CEO disruptions, and a declining legacy business. The price target is set at $22, reflecting expected underperformance.
DXC faces substantial hurdles, including a declining legacy business and CEO disruptions, which complicate its growth turnaround. The negative outlook and lower price target suggest a likely decrease in DXC's stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
JPMorgan recommends a long position on Kyndryl (KD) due to its structural advantages, profitability, and revenue growth potential. The firm has set a price target of $30, highlighting KD's ability to leverage its client base and scale.
JPMorgan's analysis highlights Kyndryl's strong client relationships and ability to up-sell services, positioning it for margin expansion and revenue growth. The positive outlook and price target suggest a likely increase in KD's stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90