It’s a cautious time for the markets, but you wouldn’t know that by looking at Canada’s CGI Group (CGI Group Stock Quote, Chart, News, Analysts, Financials TSX:GIB.A).
Shares of the Canadian tech giant topped more than $140 recently, driven by improved results. CGI reached its highest close price ever, C$141.62 on Friday July 14th 2023.
In the company posted net earnings of $415-million, which was up 13.9 per cent over the same period last year. CGI’s revenue number of $3.62-billion was 11.2 per cent higher than 2022’s third quarter.
“In the third quarter of fiscal 2023, our team again delivered double-digit EPS [earnings per share] accretion and sustained margin expansion on a year-over-year basis,” CEO George D. Schindler said. “Our results were supported by the combination of our profitable growth strategy, proven operational discipline and clients’ continued trust in CGI as their partner of choice for delivering ROI-led digitization. Strong quarterly bookings were driven by managed services and intellectual property solutions across geographies, highest in government and financial services sectors. Given the current macroeconomic environment, CGI’s diverse portfolio of geographies, industries and services serve as a resilient foundation for profitable growth.”
One analyst who called it early was National Bank Financials Richard Tse, who in February of 2023 raised his price target from $135 to $140 a share, arguing that the stock is a core tech holding.
“We believe CGI is moving back to its previous growth trajectory (both organic and inorganic) pre COVID,” Tse wrote. “Bottom line, we continue to believe CGI has more potential for outperformance given its combination of growth and defensive attributes (e.g., recurring revenue and cash flow, long-term contracts).”
At press time, shares of CGI Group were up up three cents to $133.91.
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