Truist Securities initiates Gartner stock with Buy rating on undervalued shares

Investing.com - Truist Securities initiated coverage on Gartner (NYSE:IT) with a Buy rating and a price target of $300.00 on Thursday. According to InvestingPro data, the company currently trades at a P/E ratio of 14.5x with a healthy 68% gross profit margin.

The research firm noted that Gartner is trading at approximately 40% below its historical average EV/EBITDA valuation after experiencing three years of slowing growth due to macroeconomic and industry-specific factors. The stock has declined 55% over the past year, now trading near its 52-week low of $223.65, suggesting potential value opportunity according to InvestingPro’s Fair Value analysis.

Truist Securities addressed investor concerns about potential AI disruption to Gartner’s business model, stating these fears appear "overblown" based on their analysis.

The firm believes the market is currently valuing Gartner as a low single-digit growth company, while a return to targeted double-digit organic CV growth by 2027 could significantly benefit shareholders at the current discounted valuation.

Truist highlighted Gartner’s historical strength, describing it as "one of the best models in Information Services" in their initiation report.

In other recent news, Gartner Inc. reported its second-quarter earnings for 2025, exceeding analyst expectations with an adjusted earnings per share (EPS) of $3.53, compared to the forecast of $3.30. The company’s revenue for the quarter reached $1.7 billion, slightly above the projected $1.68 billion, marking a 6% year-over-year increase. Despite these positive earnings results, Gartner’s stock saw a significant decline in pre-market trading. Additionally, Gartner expanded its share buyback authorization to $1 billion from $450 million, as noted by UBS, which maintained a Neutral rating and a price target of $270.00. RBC Capital initiated coverage on Gartner with a Sector Perform rating and a price target of $263.00, emphasizing the company’s leadership in IT research. Wolfe Research also began coverage with a Peerperform rating, setting a year-end 2026 price target range of $240-$300. These developments highlight the varied perspectives of analysts on Gartner’s performance and potential.

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