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CGI Inc. (TSE:GIB.A) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of CA$4.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CA$1.89, missing estimates by 7.2%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from CGI's 15 analysts is for revenues of CA$15.8b in 2025. This would reflect a modest 4.3% increase on its revenue over the past 12 months. Statutory per share are forecast to be CA$7.83, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$15.8b and earnings per share (EPS) of CA$8.14 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Check out our latest analysis for CGI
It might be a surprise to learn that the consensus price target was broadly unchanged at CA$174, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic CGI analyst has a price target of CA$188 per share, while the most pessimistic values it at CA$134. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CGI shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting CGI's growth to accelerate, with the forecast 8.9% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that CGI is expected to grow at about the same rate as the wider industry.