Capgemini SE (CAPP.PA): Continues to surprise on growth, execution on margin expansion in focus now; Maintain Buy

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Capgemini SE (CAPP.PA): Continues to surprise on growth, execution on margin expansion in focus now; Maintain Buy

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30 Jul 2026 21:23:40 ET │ 17 pages

Capgemini SE (CAPP.PA)

Continues to surprise on growth, execution on margin expansion in

focus now; Maintain Buy

CITI'S TAKE

Capgemini’s growth acceleration in 1H26 and raise to the 2026 growth Buy

outlook is in sharp contrast to peers, who reported a rather cautious

demand environment. Into 2nd half, while CAPP’s growth would likely be Price (30 Jul 26 17:30) €102.00

decelerating on tougher comp, improving Europe should aid growth to be Target price €135.00↑

near the upper end of the target range. With investors’ relative comfort with

from €130.00growth, focus has firmly shifted to ability to grow margins in an environment

where clients’ productivity ask and high competitive intensity have limited Expected share price return 32.4%

operating leverage. At the same time, for Capgemini, improving utilization Expected dividend yield 3.3%

in Europe is an obvious area to target – where restructuring program along

Expected total return 35.7%with return to some growth should help. We appreciate near-term lack of

company specific catalyst, however, see sustained growth and return to Market Cap €17,333M

margin improvement to aid sentiment. Maintain Buy and raise TP to €135. US$19,876M

Growth surprised (again), raised 2026 outlook prudent — 2Q26 organic growth of

~5% is peer group leading and well ahead of consensus. The continued growth

acceleration stood out for us given peers have cited macro deterioration driving Price Performance

cautious spend sentiment. CAPP’s raised 2026 growth outlook (3.5-4% organic)

(RIC: CAPP.PA, BB: CAP FP)implies deceleration to 2.5-3.5% growth in 2H – and while the comp is tougher we