CRA International’s (CRA) second-quarter earnings were modestly ahead of the Zacks Consensus Estimate primarily owing to the uptick in utilization rate backed by successful restructuring actions.
Although litigation and management consulting related areas were reasonably active, clients cautious aggregate spending and a decline in organic revenue are expected to limit the company s growth. Overall, near-term visibility remains unclear, given the current volatile market trends.
Despite showing some improvement, litigation trend remains sluggish. Finally, despite the recent pick-up in activity, the Middle East business remains uncertain. Going forward, we remain skeptical about the sustainability of the growth momentum seen in the second quarter. Hence, we downgrade the stock from Neutral to Underperform.
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