Capgemini (AO) | Buy | CMD in London this afternoon

Research evidence excerpt

Capgemini (AO) | Buy | CMD in London this afternoon

Capgemini Buy | Target Price: EUR175.00

Company description Management

Capgemini is the largest European player in IT services. Since the Altran Aiman Ezzat, CEO

acquisition, it has been the largest player in Engineering. Over 57% of its Nive Bhagat, CFO

resources are offshore, and 38% of its revenues are generated outside Europe. Key shareholders

With the acquisition of WNS, the ambition is now to also become a sizeable BPO Free float 91.60%

player in the coming years. FMR 5.00%

Employees 8.40%

Investment case Valuation methodology

The group has a strong portfolio of offerings that will help it to DCF with an 9% WACC and a 13.0% long-term margin leads to a

continue to gain significant market share and maintain a high valuation of EUR175 per share by year-end.

level of profitability in tough years. Double digit FCF 2026 yield is highly supportive for the shares

The company is positioned on high value-added projects, with Capgemini has always traded at a discount to Accenture, which

strong expertise in cloud migration, digital, and AI, and is can be justified by its lower organic growth and profitability, but

generally able to outperform the market amid decent macro there is room to reduce this gap within a few quarters now that

conditions. Cap has caught up on the growth rate.

More large deals in BPS will support the WNS acquisition Risks to our rating

strategy Higher pressure on margins than expected

Catalysts European outlook remains uncertain for the rest of the year.

Trough is now behind the company. AI disruption remains the key topic of discussion.

Stock likely to trade on higher multiples as Europe starts to

recover during 2026-2027

Discount to peers, strong catch-up on organic performance and

margins.