Slow and Steady, CGI Finishes off Fiscal 2021 With Strong Margins; Raise FVE to CAD 110

Narrow-moat CGI reported top line results largely in line with our expectations to finish off fiscal 2021. We continue to view the firm’s business pipeline as healthy, an observation underscored by the company’s continued strength across verticals and an annual book/bill ratio well above 100%. As a result, we reiterate our confidence in the company’s medium- to long-term growth prospects. With our strong near-term growth assumptions and the time value of money following our valuation model roll, we are raising our fair value estimate to CAD 110 per share from CAD 104 per share and view the shares as fairly valued.