Citi sets $7 price target on CI&T stock with buy rating

Published 25/04/2025, 12:54
Citi sets $7 price target on CI&T stock with buy rating

On Monday, Citi initiated coverage on CI&T Inc. (NYSE: CINT) with a positive outlook, assigning a Buy rating and setting a price target of $7.00 per share. The firm’s analysis highlights CI&T’s consistent performance and future potential in the technology sector.

CI&T, recognized for its robust sales growth, has a history of doubling its revenue every two to four years for the past two decades. Citi analysts view CI&T as an attractive investment opportunity, particularly for those looking to capitalize on the ongoing trend of digital transformation and AI adoption within enterprises.

The company’s financial health was also a point of emphasis, with Citi noting CI&T’s sound profitability, citing EBITDA margins between 19-25%, and strong cash flow generation, with an estimated Free Cash Flow to Equity (FCFE) yield of approximately 6% for 2026. The return on invested capital (ROIC), excluding goodwill, is also impressive, ranging from 30-40%. Furthermore, the involvement of company founders was seen as an additional positive factor, indicating a vested interest in the company’s success.

Despite acknowledging the potential risks posed by tariff tensions and recession concerns, which could introduce uncertainties in near-term demand, Citi’s recent surveys, including those from its own CIO survey and Deloitte’s study of Brazilian banks, suggest a resilient IT budget outlook. CI&T’s competitive advantages, such as client engagement, a strong tech talent pool, and advanced AI capabilities, are expected to continue to grow rapidly.

Citi also pointed out the attractive valuation of CI&T shares, which are currently trading at 12.9x and 11.0x the firm’s estimated 2026 and 2027 earnings, respectively. This valuation is seen by Citi as providing a margin of safety for investors. The coverage initiation by Citi and the positive Buy rating with a $7.00 price target reflect confidence in CI&T’s market position and financial stability.

In other recent news, CI&T Inc has filed its annual report for the fiscal year ending December 31, 2024, with the U.S. Securities and Exchange Commission. This report provides a detailed overview of the company’s financial performance, including audited financial statements and management’s discussion of the year’s results. The filing, known as Form 20-F, is a requirement for foreign private issuers like CI&T listed on U.S. stock exchanges. The annual report is accessible to the public on the SEC’s website and CI&T’s investor relations page. CI&T’s Chief Financial Officer, Stanley Rodrigues, signed off on the report, emphasizing the company’s commitment to transparency with investors. The company has a significant global presence with over 6,900 professionals across nine countries, serving more than 100 large enterprises and fast-growing clients. The report highlights CI&T’s continued expansion and its proprietary AI platform, CI&T FLOW, which the company claims enhances team productivity and delivery speed. Shareholders interested in the complete audited financial statements can contact CI&T’s Investor Relations office for a hard copy.

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