CGI Earnings: Broad-Based Strength as CGI’s Top Line and Bookings Grow at a Nice Clip

We are maintaining our CAD 130 fair value estimate for narrow-moat CGI after the firm closed out the third quarter of fiscal 2023 with strong financial results, including double-digit top-line growth and strong bookings. We believe that as the macroeconomic pressures on CGI’s clients ease, they will increasingly restart/accelerate their digital transformation plans, a tailwind for an IT services company such as CGI. At the same time, we have been impressed with CGI’s ability to navigate the tough macro while maintaining robust financial results, a testament to the firm’s strong value proposition to its clients, in both good and bad times. With shares trading slightly down after the earnings report at CAD 133, we believe that the company’s shares are fairly valued.