CGI's Job Postings Decline Signals Continued Organic Growth Pressure, RBC Says

MT Newswires Live
Apr 01

CGI's (GIB) Q1 decline in job postings suggests that organic growth is likely to remain negative in Q2, but may also imply an improvement in cost optimization, RBC Capital Markets said in a Wednesday note.

Analysts said this quarter marked the seventh consecutive sequential decline in CGI's job postings. On a quarter-on-quarter basis, CGI's job postings fell 36%, compared with a 4% rise in the overall industry.

RBC said that despite negative organic growth projections for Q2, contributions from acquisitions and share buybacks are expected to drive CGI's adjusted earnings growth.

Analysts said that while share buybacks support the stock, potential catalysts for CGI include accretive acquisitions and sequentially improved organic growth.

RBC said that CGI's organic growth is expected to rebound from Q1, which was impacted by the 43-day federal government shutdown.

The firm maintained its outperform rating on the stock with a CA$150 ($108) price target.

Price: 72.80, Change: -0.30, Percent Change: -0.41

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