CGI, the Technology sector company, was revisited by a Wall Street analyst today. Analyst Surinder Thind from Jefferies downgraded the rating on the stock to a Hold and gave it a $81.00 price target.
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Surinder Thind’s rating is based on CGI’s current challenges in achieving organic growth, which has been trailing behind its peers. The company’s significant exposure to underperforming regions such as France, Germany, and the US Federal sector has contributed to this lag. Despite CGI’s attractive price-to-earnings ratio, it remains above the peer average, prompting a cautious outlook.
Moreover, CGI has been facing persistent margin challenges, having recently completed its second restructuring program in two years to address underperformance. Although the company reported strong bookings, these figures included some backlog from previous quarters and did not translate into substantial growth. While management’s focus on share repurchases and mergers and acquisitions is expected to support earnings per share growth, the overall financial trends suggest that CGI’s stock performance may not keep pace with its peers in the near term.
According to TipRanks, Thind is a 3-star analyst with an average return of 3.6% and a 46.00% success rate. Thind covers the Technology sector, focusing on stocks such as Fair Isaac, SS&C Technologies Holdings, and Accenture.
In another report released on November 5, UBS also maintained a Hold rating on the stock with a $0.00 price target.