CGI Earnings: Strong Execution Marks the Quarter Despite Macro Pressures Persisting

We are raising our fair value estimate for narrow-moat CGI to CAD 137 from CAD 130. This raise is a result of solid fourth-quarter financial results as well as the time value of money following our valuation model roll. While macro pressures continued to stretch clients’ budgets, we are impressed by CGI’s ability to maintain a steady ship, producing strong sales and profitability during this turbulent period. We reiterate our belief that as macroeconomic pressures dissipate over the next few quarters, we expect CGI’s clients to restart/accelerate their spending on CGI’s solutions. With shares trading slightly down after the earnings report, we view them as fairly valued.