Gartner price target lowered to $500 from $525 at UBS on federal trends

UBS lowered its price target on Gartner (NYSE:IT) to $500 from $525 on Wednesday while maintaining a Buy rating on the research and advisory firm’s stock. With a market capitalization of $31.15 billion and a P/E ratio of 25, InvestingPro analysis suggests the stock is currently fairly valued.

The firm cited slowing federal cancellations in May and June, suggesting that DOGE momentum could be fading somewhat. UBS noted this trend provides some support for Gartner’s federal business segment.

Outside of the federal sector, UBS observed that confidence indicators have softened, suggesting the overall selling environment for Gartner may have worsened in recent months.

UBS projects slightly lower contract value growth for Gartner in the second quarter compared to Wall Street expectations, estimating 5.9% growth versus the Street’s 6.2% forecast. The firm indicated that both the range of outcomes and elements of surprise appear reduced in Q2 compared to Q1.

The research firm highlighted that Gartner shares are currently trading at 20 times next-twelve-months EBITDA, representing the lowest valuation in approximately two years, while contract value headwinds are increasingly reflected in the stock price.

In other recent news, Gartner Inc. reported its first-quarter earnings for 2025, revealing adjusted earnings per share (EPS) of $2.98, surpassing the forecast of $2.75. The company’s revenue met expectations at $1.53 billion, marking a steady 4% growth. Despite these positive earnings, Gartner experienced challenges with a significant renewal cycle with the US Federal Government, where approximately 40% of contracts were up for renewal, and about half were not renewed. Analysts at BMO Capital Markets responded to these developments by adjusting their price target for Gartner shares from $459 to $465, maintaining a Market Perform rating. Additionally, Gartner’s recent stockholder meeting concluded with the election of eleven nominees to the Board of Directors and the ratification of KPMG LLP as the independent registered public accounting firm for 2025. The company also received advisory approval for the compensation of its named executive officers. These developments reflect Gartner’s ongoing efforts to navigate a complex market environment while focusing on strategic investments in AI and expanding its sales force.

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