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Investing.com - BMO Capital lowered its price target on Constellation Software (TSX:CSU) to C$4,600 from C$5,400 while maintaining an Outperform rating following the company’s third-quarter 2025 results.
The Canadian software conglomerate reported quarterly results that were light on revenue but exceeded expectations for EBITDA, with Constellation excluding spin-offs, Topicus, and Lumine Group all showing quarter-over-quarter margin expansion.
BMO Capital analyst Thanos Moschopoulos cited concerns about artificial intelligence potentially constraining multiple expansion opportunities as a key factor in the reduced price target, noting that the bearish thesis on AI impact "will likely take time to disprove."
Despite the price target reduction, BMO Capital maintained its Outperform rating, expressing belief that Constellation Software could continue compounding at a mid-teens compound annual growth rate (CAGR) over the medium term.
The investment firm also suggested that Constellation Software "might well be a net beneficiary of AI" despite near-term market concerns about artificial intelligence’s impact on the software sector.
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