CGI Earnings: Continued Bookings Strength Is a Good Omen for CGI’s Future Financial Prospects

We maintain our CAD 137 fair value estimate for narrow-moat CGI after the firm reported strong third-quarter financial results largely in line with our expectations. Forward-looking metrics, such as bookings, showed strength, underscoring the enduring demand for CGI’s IT services expertise despite the tough macro backdrop. Despite the strong bookings, we believe that the near-term picture for CGI, as well as its other IT services peers, remains cloudy as discretionary customer spending on IT services remained muted. As the macro conditions gradually improve, we expect the demand rebound to be accelerated by organizations embarking on AI-related projects. With shares trading slightly up after the earnings report, we view them as fairly valued.