Capgemini Raises 2021 Outlook Significantly in Light of Standout Quarter; Increasing FVE

Capgemini's first half of the year was stellar one--as it beat top-line consensus, based on Factset estimates, all while management made significant changes to its 2021 outlook, for the better. The beat was due to a stronger recovery than expected across all geographies. Given the scale of Capgemini’s outlook adjustments, we’re raising our fair value estimate for the no-moat company substantially to EUR 166 from EUR 134--which includes more optimistic growth in our near- and long-term forecasts. With the fair value raise, we view Capgemini as fairly valued, even after the stock is up 3% to EUR 176 per share.