Scotiabank has nudged its outlook for CGI Group higher after the technology consultancy delivered a solid second quarter, with the bank lifting its FY2026 earnings forecast to $6.58 a share from $6.50. The revised estimate, published in a note on Friday, sits just above the current market consensus of $6.54 a share, although Scotiabank kept its "Sector Perform" rating on the stock.

The upgrade came after CGI reported quarterly results on 29 April that showed revenue of $4.16 billion, up 3.3% from a year earlier, while diluted earnings per share rose 10.6% to $2.09. The company also said earnings before income taxes increased 6.0% to $617.7 million and adjusted EBIT climbed to $691.6 million, with operating cash flow of $451.1 million and backlog of $31.5 billion at the end of March.

The latest quarter helped reinforce the picture of a business still generating healthy cash and preserving margins even as growth remains measured. TechMarketView said the UK and Australia division was a standout, with revenue up 19.3% year on year to CAN$569.1 million, supported by demand in government, utilities and financial services and helped by BJSS. The same analysis pointed to a 16.2% adjusted EBIT margin for the segment, an improvement from 14.5% a year earlier.

Broker sentiment remains mixed. According to MarketBeat’s compilation, TD Securities upgraded CGI to a strong-buy rating in January, while Weiss Ratings moved the stock to sell in March. Royal Bank of Canada cut its view to sector perform this week and UBS lowered its target price, leaving the shares with an average hold rating and a consensus target of $83.67. CGI also recently declared a quarterly dividend of $0.17 a share, payable on 19 June, underscoring a modest but steady capital return policy.

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Source: Noah Wire Services