DXC Technology Co (NYSE:DXC) was cut to Underperform from Peer Perform at Wolfe Research on Tuesday, with analysts assigning the stock a $22 per share price target.
DXC shares have plunged more than 7% following the re-rating, trading around $20.56 just before the open.
Analysts said that cyclical and structural challenges point to an uncertain outlook for the information technology company.
The firm believes "shares may remain challenged pending greater line-of-site to an inflection in revenue growth," as "the IT services industry is facing cyclical headwinds, and visibility for a rebound remains low."
"While we are constructive on the company's GBS business (notably analytics and applications), within GIS, Modern Workplace and Cloud/ITO remain structurally challenged, in our view," analysts added.
"We recognize the company maintains strong relationships with many leading companies, and GBS could be a strength in a more normalized macro environment," wrote the analysts. "That said, we believe that the combination of structural headwinds and cyclical pressures near term make owning shares challenging over the next couple of quarters."