Research Alert: CFRA Maintains Hold Opinion On Shares Of Cgi Inc.
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We cut our price target by CAD36 to CAD102, 11.5x our FY 26 (Sep.) EPS view, below CGI's three-year average (~18x) on macro uncertainty and U.S. Federal risks. We lower our FY 26 EPS view by CAD0.02 to CAD8.88 and lower FY 27's by CAD0.12 to CAD9.40. We are concerned that Q2's continued sales deceleration (+1.6% ex-FX, -180 bps Q/Q, -170 bps Y/Y) reflects structural pressure rather than just temporary issues. Q2's bookings decline (-4% Y/Y) and lower TTM book-to-bill of 108.4% (-220-bps Y/Y) also signal risk as clients keep delaying spending decisions, and we note the decline came despite strong bookings performance in U.S. Federal (TTM book-to-bill of 110.9%), where CGI's expectation of an organic sales growth resumption in Q3 carries uncertainty and may be overshadowed by European weakness, in our view. The company's lack of formal guidance increases our uncertainty. Nonetheless, a below-historical valuation and targeted Q3 organic sales pickup in U.S. Federal offer near-term upside if CGI can execute.
