CIBC analyst Stephanie Price has adjusted the price target for CGI (GIB, Financial), reducing it from C$183 to C$180. Despite this slight decrease, she continues to maintain an Outperform rating on the stock. This change reflects ongoing adjustments in market expectations and evaluations surrounding CGI's future performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for CGI Inc (GIB, Financial) is $122.28 with a high estimate of $134.84 and a low estimate of $93.74. The average target implies an upside of 22.31% from the current price of $99.98. More detailed estimate data can be found on the CGI Inc (GIB) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, CGI Inc's (GIB, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CGI Inc (GIB, Financial) in one year is $119.80, suggesting a upside of 19.82% from the current price of $99.98. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CGI Inc (GIB) Summary page.
GIB Key Business Developments
Release Date: April 30, 2025
- Revenue: $4 billion, up 7.6% year-over-year or 3.3% excluding foreign exchange impact.
- Adjusted EBIT: $666 million, up 5.9% year-over-year, margin of 16.5%.
- Earnings Before Income Taxes: $583 million, margin of 14.5%, down 90 basis points year-over-year.
- Adjusted Net Earnings: $481 million, up $21 million year-over-year, margin of 11.9%.
- Diluted EPS: $2.12, an increase of 7.6% year-over-year.
- Net Earnings: $430 million, margin of 10.7%.
- Cash from Operations: $438 million, representing 11% of total revenue.
- Book-to-Bill Ratio: 112%, with North America at 124% and Europe at 101%.
- Global Backlog: $31 billion, or 2 times revenue.
- Dividend: Quarterly cash dividend of $0.15 per share, payable on June 20, 2025.
- Restructuring Costs: $44 million incurred, with an additional $137 million expected.
- Return on Invested Capital: 15.4%, down 50 basis points year-over-year.
- Capital Investments: $100 billion into business, including AI, and $1.56 billion for acquisitions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CGI Inc (GIB, Financial) reported a 7.6% year-over-year increase in revenue, reaching $4 billion, driven by recent business acquisitions.
- The company achieved a strong book-to-bill ratio of 112%, with North America at 124% and Europe at 101%, indicating robust demand for their services.
- Managed services bookings exceeded $5 billion in the first half of the year, up 21% year-over-year, highlighting strong client interest in this area.
- CGI Inc (GIB) completed three acquisitions in the quarter, expanding its presence in key markets such as the UK, Germany, and Quebec City.
- The company maintained a strong return on invested capital at 15.4%, despite recent acquisitions, demonstrating effective capital management.
Negative Points
- Earnings before income taxes were down 90 basis points year-over-year, primarily due to restructuring and acquisition-related costs.
- The company incurred $44 million in restructuring costs in the quarter and expects to incur an additional $137 million in the coming quarters.
- Revenue growth in Europe was only 0.7% due to softer market conditions, particularly in the manufacturing sector.
- IP revenue represented 21.5% of total revenue, down 90 basis points year-over-year due to the dilutive impact of recent business acquisitions.
- The company is facing challenges in the Continental Europe operations, leading to an expanded restructuring program impacting approximately 1.5% of employees.
