The deal had Bay Street buzzing and instantly made CGI Group Canada’s most valuable technology stock. The company’s 14% gain Thursday pushed its market cap over the $6-billion dollar mark, past that of Research in Motion and SXC Health.
Versant Partners analyst Tom Liston, who already had a BUY rating on CGI and had raised his target slightly after the Montreal based company reported its Q2 numbers in April, likes the Logica deal. But in a research update to clients Thursday, Liston says he is waiting until all the paperwork is in before he revisits his current $25 target on the stock.
______________________________________________________________________________________________________________________
This story is brought to you by Cantech Letter sponsor BIOX (TSX:BX). The largest producer of biodiesel in Canada, BIOX’s proprietary production process has the capability to use a variety of feedstock, including recycled vegetable oils, agricultural seed oils, yellow greases and tallow. For more information CLICK HERE.
______________________________________________________________________________________________________________________
Liston says the Logica pickup means CGI now has “true global presence”. While he acknowledges that there is risk to a European acquisition, he believes the low multiple CGI will pay is a safeguard.
But Liston points out that the CGI-Logica deal is not a certain as some may assume. Because the deal has no break-fee, he says, there is the “probability of a competing bid”.
If the deal, which is expected to close in September, does goes through it will mean a much more profitable CGI Group. Liston estimates that that pro forma adjusted earnings will $703.7 million, or $2.46 a share, up from CGI’s current $452.6-million, or $1.75 a share. The Versant analyst says investors should also expect revenue and earnings synergies from the deal.
CGI was founded in Montreal in that city’s Olympic Year of 1976. The Company’s name is an acronym for Consultants to Government and Industry. Today’s acquisition is the second major one for CGI in two years. Midway through 2010, CGI picked up Stanley, an Arlington, Virginia based systems integrator for a billion dollars.
Shares of CGI group closed Friday down 2.4% to $23.37.
_____________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________
It happened. The move that everyone in the cannabis sector was hoping for came about swiftly on the last day… [Read More]
Following the company's first quarter results, Roth MKM analyst Suji Desilva has maintained his "Buy" rating on Advanced Micro Devices… [Read More]
Ahead of the company's third quarter results, Roth MKM analyst Scott Irwin has maintained his "Buy" rating on Wolfspeed (Wolfspeed… [Read More]
It's become one of the biggest players in the Canadian healthcare space, now WELL Health (WELL Health Stock Quote, Chart,… [Read More]
Its stock has made a since last October, but is there more upside left in Thomson Reuters (Thomson Reuters Stock… [Read More]
Following a widely applauded first quarter beat, Roth MKM analyst Rohit Kulkarni has maintained his "Buy" rating on Alphabet (Alphabet… [Read More]
View Comments
if Logica has stupid and cunning Employees like Venkat Limbekar, Karthick Mathivanan, and Vinod Nair there is no doubt it is under loss and getting sold !!!!!I did a good job of coming out this yellow shit company within 1 month !!!! Whatever bad they wanted to do to me has turned out to be a very good thing in my life...... Jai Hind !Satya Meva Jayate !!!