Scotiabank has launched coverage of CGI Group Inc (TSX:GIB/A) (NYSE:GIB), assigning a Sector Perform rating and setting a target price of C$140.00.
According to InvestingPro data cited by the bank, CGI shares were trading at $89.19, a level that implies potential upside relative to Scotiabank’s Fair Value assessment. The information technology services provider carries a market capitalization of $19.12 billion and is scheduled to report earnings tomorrow.
In its initial coverage, Scotiabank values CGI at a slight premium to the broader IT services peer group, applying roughly 9.3x CY2027E EV/EBITDA versus the peer average of 8.8x. By comparison, CGI currently trades at an EV/EBITDA multiple of 10.55x and a price-to-earnings ratio of 16.67.
The bank’s neutral recommendation is driven mainly by the company’s exposure to discretionary IT expenditures concentrated in its Consulting business, which is part of the Systems Integration and Consulting - SI&C - segment. Scotiabank highlighted that the SI&C division has recorded book-to-bill ratios below 100% for several consecutive quarters, a condition that has weighed on revenue growth.
Those dynamics have produced flat to slightly negative organic growth for CGI, and Scotiabank expects that trend to persist through at least the first half of fiscal 2026.
Alongside the coverage note, CGI announced a global alliance with OpenAI intended to scale enterprise AI capabilities across industries. The partnership is described as building on a prior pilot program the company ran with OpenAI in the United Kingdom, and it aims to deploy AI functionality with an emphasis on secure and responsible implementation.
Separately, RBC Capital has reiterated an Outperform rating on CGI, retaining a price target of C$165.00. RBC’s commentary noted a 5% decline in job postings quarter-over-quarter, marking the sixth straight quarter of sequential declines. Despite that hiring metric, RBC’s stance signals continued confidence in the company’s market positioning.
Taken together, the new coverage from Scotiabank, CGI’s strategic AI collaboration, and RBC’s reaffirmation illustrate contrasting inputs for investors: valuation and partnership momentum on one hand, and near-term top-line pressure tied to consulting demand on the other.