The Globe and Mail reports in its Friday, Jan. 30, edition that Canaccord Genuity analyst Robert Young has reiterated his "buy" recommendation for CGI. The Globe's Darcy Keith writes that Mr. Young gave his share target a $5 trim to $150. Analysts on average target the shares at $151.15. Organic growth in CGI's latest quarter showed weakness and the company now faces risks given the possibility of another U.S. government shutdown. Mr. Young says in a note: "CGI reported in line FQ1 results with 8-per-cent sales growth but a small organic top-line decline driven by US Federal and Canada. CGI sees sequential improvement through F26 and expanding revenue per employee but warned of continued US Federal volatility, particularly a risk of a second shutdown when the current continuing resolution, which keeps the government funded, ends this Friday, Jan. 30. On the positive side, bookings were strong in the quarter (1.1 times B2B), even considering weakness in the U.S. Federal business (B2B was 1.18 times ex U.S. Fed). ... We remain positive overall on CGI's durable cash generation, disciplined capital deployment, position to benefit from sector consolidation and strong recent bookings performance despite headwinds."
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