CGI Group’s Q3 gets thumbs up at Dundee Capital Markets

CGI Group’s (CGI Group Stock Quote, Chart, News: TSX:GIB.A) third quarter results came in a little better than Dundee Capital Markets analyst Eyal Ofir expected.

This morning, CGI Group reported its Q3, 2016 results. The company earned $273.8-million on revenue of $2.7-billion, a topline that was up 4.2 per cent over the same period last year.

“Our team delivered very balanced results, with all key performance indicators showing year-over-year improvement,” said CEO Michael Roach. “We continue to see growing demand across all of our services and solutions, reinforcing our strategy to be our clients’ end-to-end legacy and digital transformation partner of choice. Our transformational outsourcing services enable our clients to reduce their run costs to invest in their change agenda, and leverage our services such as security and automation, all of which are supported by our comprehensive portfolio of IP solutions that accelerate our clients’ digital transformation.”

Ofir says CGI’s revenue was in-line with his expectations, while earnings were slightly better than he had modeled. The analyst notes that bookings remain strong.

“Considering that a number of analysts have recently revised estimates downward combined with depressed results out of the IT services market, we believe that the posted results of meeting top line expectations and mildly beating on the bottom should be a sigh of relief,” says the analyst. “Although the stock has rebounded since the Brexit vote to pre-Brexit levels, we see the results as driving the shares higher.”

In a research update to clients today, Ofir maintained his “Buy” rating and one-year price target of $68.00 on CGI Group.