Earnings Release: Here's Why Analysts Cut Their Capgemini SE (EPA:CAP) Price Target To €161

Capgemini SE (EPA:CAP) shareholders are probably feeling a little disappointed, since its shares fell 8.7% to €104 in the week after its latest annual results. It was a credible result overall, with revenues of €22b and statutory earnings per share of €9.13 both in line with analyst estimates, showing that Capgemini is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following the latest results, Capgemini's 17 analysts are now forecasting revenues of €23.9b in 2026. This would be a satisfactory 6.2% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be €9.41, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of €23.7b and earnings per share (EPS) of €9.87 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Capgemini

The average price target fell 7.0% to €161, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Capgemini analyst has a price target of €208 per share, while the most pessimistic values it at €135. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2026 brings more of the same, according to the analysts, with revenue forecast to display 6.2% growth on an annualised basis. That is in line with its 6.1% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 4.5% annually. So it's pretty clear that Capgemini is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Capgemini. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Capgemini going out to 2028, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Capgemini that you should be aware of.

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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.