Capgemini Earnings: Reducing Fair Value Estimate 5% to EUR 200 on Guidance Cut; Shares Undervalued

Narrow-moat Capgemini reported first-half numbers that were broadly in line with FactSet consensus. However, fiscal 2024 constant-currency revenue growth guidance was cut to negative 0.5%-negative 1.5% from 0%-3%, which is below our previous estimate of 2.5% growth. Shares were down around 10% intraday. We’ve lowered our near-term forecasts and reduced our fair value estimate to EUR 200 from EUR 210. At current levels, the shares look undervalued.