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Investing.com - UBS lowered its price target on Gartner (NYSE:IT) to $480.00 from $500.00 on Tuesday, while maintaining a Buy rating on the research and advisory company’s stock. The stock currently trades at $373.28, near its 52-week low of $366.05, having declined 26.7% over the past six months. According to InvestingPro analysis, the company maintains a GOOD financial health score.
The firm expects Gartner’s second-quarter contract value growth to come in below consensus estimates, projecting +5.9% compared to the Street’s +6.3% forecast, primarily due to continued federal headwinds and what appears to be a choppier selling environment outside the federal sector.
UBS noted that despite the challenging backdrop, recent investor conversations have been "decidedly negative," suggesting that buy-side expectations may already be calibrated to match UBS’s projections for the quarter.
The firm believes Gartner likely has room to raise its 2025 revenue and EPS guidance, citing modest incremental foreign exchange tailwinds and typical conservatism in the company’s guidance approach.
UBS compared the current stock setup heading into earnings to last quarter’s situation, where most negative sentiment occurred before the earnings release, potentially resulting in a muted reaction when actual results are announced.
In other recent news, Gartner Inc. reported its first-quarter 2025 earnings, surpassing analyst expectations with an adjusted earnings per share (EPS) of $2.98 compared to the forecasted $2.75. The company’s revenue matched projections at $1.53 billion, with a steady growth rate of 4%. Despite the positive earnings report, Gartner’s stock experienced a decline, reflecting broader market concerns. Additionally, Gartner’s 2025 Annual Meeting of Stockholders resulted in the election of eleven board members and the approval of executive compensation and KPMG LLP as the independent accounting firm.
BMO Capital Markets adjusted its price target for Gartner to $465, citing the company’s favorable financial performance despite a less optimistic operational outlook. This comes as Gartner navigates challenges with the US Federal Government contract renewals, with 40% of contracts up for renewal in the first quarter and about half not being renewed. UBS also revised its price target for Gartner to $500, maintaining a Buy rating, while noting slowing federal cancellations and a challenging selling environment. These developments highlight the mixed outlook for Gartner as it balances strong financial performance with operational headwinds.
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