Yahoo Finance CGI Inc. (TSE:GIB.A) Just Reported And Analysts Have Been Lifting Their Price Targets
Investors in CGI Inc. (TSE:GIB.A) had a good week, as its shares rose 6.3% to close at CA$156 following the release of its quarterly results. Revenues of CA$3.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$1.67, missing estimates by 3.0%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for CGI
Following the latest results, CGI's 15 analysts are now forecasting revenues of CA$14.9b in 2024. This would be a reasonable 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 4.2% to CA$7.42. Before this earnings report, the analysts had been forecasting revenues of CA$14.9b and earnings per share (EPS) of CA$7.61 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 6.3% to CA$160, suggesting the revised estimates are not indicative of a weaker long-term future for the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values CGI at CA$175 per share, while the most bearish prices it at CA$126. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CGI's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 3.8% growth on an annualised basis. That is in line with its 3.7% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 4.4% per year. It's clear that while CGI's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for CGI going out to 2026, and you can see them free on our platform here.
You can also see whether CGI is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
