F1Q27 Preview: Weak Backdrop Likely Extends Turnaround Time; Leadership Clarity Encouraging

研报英文原文证据摘录

F1Q27 Preview: Weak Backdrop Likely Extends Turnaround Time; Leadership Clarity Encouraging

conversion remain the key areas of focus. Investors will e = Morgan Stanley Research estimates

Quarterly EPS ($)

likely focus on whether KD can stabilize managed services and offset IBM-related

2027e 2027e 2028e 2028e

pressure from customers increasingly procuring IBM hardware/software directly by Quarter 2026 Prior Current Prior Current

Q1 0.38 0.15 (0.05) 0.59 0.61

shifting the mix toward pure services and new-logo wins. The appointments of Ellen Q2 0.38 0.54 0.57 0.58 0.61

Johnson as incoming CFO, effective August 6, and Andrew Bonzani as General Q3 0.52 0.59 0.62 0.74 0.64

Q4 0.18 0.56 0.70 0.72 0.62

Counsel and Secretary provide helpful continuity and address a key investor

e = Morgan Stanley Research estimates

concern around filling permanent leadership roles. Johnson previously served as

CFO of Interpublic Group (IPG), which was recently acquired by Omnicom (covered

by Sean Diffley), following a long tenure in senior finance and treasury roles,

including CFO of IPG Mediabrands. Greater clarity on the management transition is

constructive, though we await evidence of its impact on execution and the long-term

outlook.

Changes to estimates, PT unchanged at $13. Given weaker read-through

commentary on demand trends, we now look for FY27 revenue declines of -2% y/y

cc (vs. -1.1% prior). We're also adjusting our estimates to incorporate a larger share

of the workforce rebalancing charges in Q1, in line with management expectations,

bringing our Q1 adjusted PTI to -$17M (vs. +$51M prior), while our FY27 adjusted PTI

moves to $600M (vs. $616M prior), at the low end of company guidance. This Morgan Stanley does and seeks to do business with