Discover Why DXC Technology (DXC) is Emerging as a Must-Buy Stock Right Now!

DXC Technology Company (DXC) has recently been upgraded to a Zacks Rank #1, also known as a Strong Buy. This change comes as earnings estimates for the company are on the rise, which can significantly influence stock prices.

The Zacks rating system focuses on a company’s earnings outlook. It compiles the Zacks Consensus Estimate, which reflects the average earnings per share (EPS) predictions from analysts tracking the stock for both the current and upcoming years.

This shift in earnings expectations can indicate stock price movements. The Zacks rating is particularly useful for investors who want to make informed choices, especially when Wall Street ratings often depend on less visible factors.

The positive upgrade for DXC suggests that investors are optimistic about its earnings trajectory, which may drive buying interest and push the stock price up.

Research shows that shifts in earnings estimates correlate strongly with stock performance. Institutional investors pay attention to these estimates, as they help assess a company’s fair market value. When earnings estimates rise or fall, these large investors usually make trades that impact the stock’s price.

Higher earnings estimates and the upgrade in DXC’s Zacks rank signal a healthier business outlook. Investors typically respond positively, likely resulting in a stock price increase.

Historically, tracking earnings estimate changes has been a smart strategy for investors. The Zacks Rank system, which categorizes stocks based on earnings revisions, plays a crucial role here. It sorts stocks from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell). Stocks in the #1 category have achieved an average annual return of +25% since 1988.

DXC Technology’s upgrade to Zacks Rank #1 means it’s among the top 5% of stocks for earnings estimate revisions, indicating a potential for price growth.

For the fiscal year ending March 2025, DXC is projected to earn $3.18 per share, which is a modest rise of 1.6% year-over-year. In the last three months, analysts have raised their earnings forecasts for the company by 10.1%.

Unlike other rating systems that lean towards positivity, the Zacks system maintains a balance between buy and sell ratings across more than 4,000 stocks, ensuring only the top 20% are identified as strong contenders for superior returns.