Why Convergys Corp got downgraded?

Convergys Corp (NYSE:CVG) received a stock rating downgrade from Sidoti on Apr-04-16. In a note to investors, the firm issued a Neutral rating. The analysts previously had a Buy rating on the stock.

Analysts have a consensus target price of $28.25 in the 12-month period. The price objective is 5.57% higher than the recent closing price of $26.76. The 52-week price range is $20.37-$27.84 and the company has a market capitalization of $2.59 billion. Analysts covering the shares maintain a consensus Buy rating, according to Zacks Investment Research. Zero analyst has rated the stock with a sell rating, 3 has assigned a hold rating, 0 says it’s a buy, and 1 have assigned a strong buy rating to the company.

Convergys Corp (CVG) on February 23, 2016 announced its financial results for the fourth quarter and full year 2015.

Fourth Quarter Summary

• Revenue of $752 million, down 2 percent as reported and up 1 percent on a constant currency basis compared with prior year;


• GAAP operating income of $61 million, up 22 percent compared with prior year; adjusted operating income of $75 million, up 12 percent compared with prior year;


• Adjusted EBITDA of $105 million, up 6 percent compared with prior year;


• GAAP EPS from continuing operations of $0.41, compared with $0.46 in prior year; adjusted EPS from continuing operations of $0.53, compared with $0.52 in prior year;


• Adjusted free cash flow of $48 million;


• $28 million capital returned to shareholders via share repurchase and dividend;


• 2016 outlook includes improvement in revenue and earnings.

“We performed well in the fourth quarter with constant currency revenue growth and increases in operating income, EBITDA and adjusted EPS,” said Andrea Ayers, President and CEO. “For 2015, results included another year of double-digit earnings growth, sustained margin expansion, record revenue and strong cash flow generation. Throughout the year, we continued to invest in our unique global platform to drive operational excellence for our clients as well as deliver on our commitment to return capital to shareholders. We returned $102 million to investors through our raised dividend and share repurchase program, consistent with our disciplined capital deployment strategy. As we begin 2016, our record of operational excellence, progress in penetrating high-growth verticals and new business signings give us confidence in our ability to grow, diversify our client base and further expand margins. The company’s platform for strategic growth and value creation is strong, and on a constant currency basis, we expect higher revenue, EBITDA and EPS in 2016.”

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