Capgemini: Growth continues to trend above expectations; market is looking to see growth upside translate into margin upside

Research evidence excerpt

Capgemini: Growth continues to trend above expectations; market is looking to see growth upside translate into margin upside

J P M O R G A N Europe Equity Research

31 July 2026

Capgemini

Growth continues to trend above expectations; market Neutral

is looking to see growth upside translate into margin CAPP.PA, CAP FP

upside Price (30 Jul 26):€102.00

▼Price Target (Dec-27):€130.00

Prior (Dec-27):€150.00

Capgemini saw organic revenue growth accelerate further in Q2 to ~5% Y/Y (first

take) and increased its growth guidance for 2026, now expecting ~3.75% organic European Tech Software & IT

Servicesrevenue growth Y/Y versus ~2.75% Y/Y at the midpoint previously. Whilst

organic growth continues to see better than expected momentum, gross margins Toby Ogg AC

were down 30bps Y/Y in H1 (with management citing France and Rest of Europe (44-20) 7742-3278

toby.ogg@jpmorgan.com

as sources of this, with fit for growth benefits to come in H2) and the EBIT margin J.P. Morgan Securities plc

guidance range (13.6%-13.8%) was left unchanged despite the upgraded revenue

Joseph George

growth. Looking forward, management are confident in the H2 improvement in (44-20) 3493-6990

both gross margin and EBIT margin, helped by the benefits of the fit for work joe.george@jpmorgan.com

programme starting to flow through into the P&L. Whilst growth trends are J.P. Morgan Securities plc

encouraging, certain parts of the business are recovering from depressed Priya R Suneja

levels (e.g. France) and so the market is looking to ascertain the normalised (91-22) 6157 4721

steady state organic growth in the AI era and build confidence in the priya.suneja@jpmchase.com

durability of margin expansion and see growth upside translate into margin J.P. Morgan India Private Limited

upside. Giulio Gambardella