Gartner (IT) is facing a "relatively balanced setup" into its Q1 results, which marks a change from much of the last year when it was expected to see downside to its contract value growth, UBS said in a note Thursday.

Ahead of the company's Q1 results, UBS is forecasting contract value growth of 1.4%, which is slightly above the consensus forecast of 1.3% amid an "admittedly challenging selling backdrop." UBS noted that its previous estimate for the company's contract value growth was higher at 1.9%.

"The reduction in our Q1 [contract value] growth rate is driven by some incremental [contract value] loss in Fed and a weaker ex. Fed backdrop," the note said.

UBS said that, unlike in recent quarters, consensus contract value forecasts are "better calibrated." The investment firm noted that "while worries about AI are still very much at the forefront, the [contract value] setup versus expectations is simply better now than it has been in the last several quarters."

The investment firm adjusted Gartner's 2027 earnings per share estimate to to $14.32 from $14.39 citing "slightly lower revenue and revenue growth." The firm still expects Gartner to post 2026 EPS of $13.38.

UBS cut Gartner's price target to $166 from $180, and has a neutral rating on the company.

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