Capgemini (ENXTPA:CAP): Valuation Insights After Securing Key Role in ECB’s Digital Euro Project

Capgemini (ENXTPA:CAP) is drawing attention after being selected, together with partners Giesecke+Devrient and Nexi, as the leading provider for the European Central Bank's digital euro offline payment solution. This collaboration highlights Capgemini’s role in reshaping digital payments across Europe.

See our latest analysis for Capgemini.

Capgemini's pivotal role in the ECB’s digital euro project comes as the company steps up its presence at influential industry conferences, including a keynote at ITC Vegas this month. Over the past year, the share price has faced real headwinds. A 1-year total shareholder return of -33.02% reveals a pronounced cooling in momentum, even as Capgemini remains a technology partner on groundbreaking European payments initiatives.

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With Capgemini trading nearly 40% below its analyst price target even after a year of sharp declines, is this a rare entry point for patient investors, or is the market already factoring in the company’s next chapter?

Most Popular Narrative: 30% Undervalued

Compared to Capgemini’s last close at €120.30, the most widely followed narrative sees fair value much higher, creating a wide valuation gap. Investors are left weighing whether this disconnect is a glaring opportunity or a warning sign about future growth and margins.

Capgemini's expanding leadership and strong deal wins in advanced cloud, data, and artificial intelligence (including Gen AI and Agentic AI) are positioning the company to benefit from the accelerating client demand for digital transformation. This supports a pipeline for higher-value, higher-margin contracts that could drive long-term revenue and margin expansion.

Read the complete narrative.

Want to know what powers this punchy price estimate? It comes down to ambitious projections for profit margins and a growth path that hinges on widespread digital transformation. What hidden assumptions are baked into this bullish outlook? The details may surprise you and crucial insights await in the full narrative.

Result: Fair Value of €172.07 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent revenue declines in key European regions or margin pressures from fierce competition could challenge the optimistic growth and valuation case for Capgemini.

Find out about the key risks to this Capgemini narrative.

Another View: Looking Through the Lens of Multiples

Taking a different approach from the narrative-based analyst outlook, Capgemini’s current price-to-earnings ratio sits at 13.1x. That is higher than its closest peers (11.2x), yet still much cheaper than the broader European IT industry average (19.0x). The fair ratio stands even further above at 25.7x, which is the level market sentiment could eventually lean toward. Does this gap reflect undiscovered value, or a warning about tough times still ahead?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Capgemini Narrative

If you have a different perspective or want to dive into the numbers yourself, crafting your own view takes less than three minutes. Do it your way

A great starting point for your Capgemini research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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