Capgemini Caps Off a Stellar Beat-and-Raise Quarter; Increasing FVE to EUR 190; Shares Fairly Valued

Capgemini closed out its third quarter in style, not only with a top line that exceeded our expectations but also a material increase in revenue and operating margin guidance for the full year. We attribute this beat to continued strength across geographies as the global economy bounces back after the pandemic. Given the beat and upward revision of top-line and margin guidance, we're raising our fair value estimate for the no-moat company to EUR 190 from EUR 166--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 6% to EUR 200 per share.