DXC Technology stock tumbles to lead S&P 500 losers, after J.P. Morgan turns bearish

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Shares of DXC Technology Co.
DXC,
-9.69%
tumbled 10.0% in afternoon trading Tuesday toward a four-week low, enough to pace the S&P 500’s
SPX,
-0.96%
decliners, after J.P. Morgan analyst Tien-tsin Huang turned bearish on the technology consulting services company. The stock was headed for the biggest one day selloff since it dropped 12.8% on June 11, 2020. Huang downgraded DXC to underweight from neutral, saying the company faces a “high bar” of transitioning to a positive revenue growth profile, which could also run into supply challenges. DXC faces the “heavy weight” of its legacy business, which is “declining at a fact clip and could delay the transition point when growth turns positive,” Huang wrote in a note to clients. He noted that expanding margins and growing revenue at the same time has proven difficult for the company in the past. The stock has now lost 13.5% since closing at a two-year high of $43.42 on Aug. 3 but has still gained 45.9% year to date, while the S&P 500
SPX,
-0.96%
has advanced 17.8% this year.

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