Why Cowen Calls This Tech Stock the "Best Idea for 2019"

The shares have shed nearly 40% since late September

The shares of DXC Technology Co (NYSE:DXC) are up 2.9% at $59.65, after Cowen and Company upgraded the IT services stock to "outperform" from "market perform," saying the stock's attractive price combined with strong management creates "significant upside potential" and that it's the "best idea for 2019." But amid DXC's sharp sell-off from its late-September highs, the brokerage firm also cut its price target to $80 from $90 -- though this is still a 38.9% premium to last Friday's close.

Specifically, DXC has plunged more than 38% from its Sept. 21 record high of $96.75, due mostly to a 16.3% plunge on Oct. 24 following news of a key executive departure. The negative price action was only exacerbated earlier this month, when DXC gapped 12.5% lower after earnings, eventually making its way to a 20-month low of $57.59 last Friday.

Most analysts echo Cowen's bullish outlook toward DXC stock, with the majority of the 14 covering brokerages maintaining a "buy" rating. Along similar lines, the average 12-month price target of $88.16 represents expected upside of almost 48% to current trading levels.

Short sellers, on the other hand, have been ramping up their exposure to the tech stock. In the last two reporting periods, short interest on DXC jumped 13.1% to 5.93 million shares -- likely amplifying pressure on the stock. However, the current number of shares sold short accounts for just a low 2.1% of the security's available float.