Kyndryl (KD) could still meet its fiscal 2026 targets with a strong execution following a "slight" revenue miss in Q2, Morgan Stanley said in a report Thursday.

"Slight rev shortfall in the Sept. qtr. makes FY26 growth targets slightly more demanding, but we leave room for strong execution to drive back-half ramp," the report said.

"Increased M&A focus delivers growth optionality, while share repurchases provide valuation support," it added.

The note also said the reiteration of a constant-currency revenue growth of 1% in fiscal 2026 is underscoring the company's confidence in a sharp back-half recovery.

Morgan Stanley lowered its price target to $28 from $30 while keeping its equal weight rating.

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