Morgan Stanley has maintained its Equalweight rating on shares of Gartner (NYSE: NYSE:IT) but increased the price target to $528 from the previous $490.
The adjustment reflects the firm's view that the company's foreign exchange (FX)-neutral growth is anticipated to align with market expectations for the current quarter, around 7.3%.
The firm's analysis, including the ACER tracker, suggests that FX-neutral contract value (CV) growth is projected at 6.8%, which is slightly below the anticipated figures. Additionally, there is an observed decline in web traffic for Gartner, with a 12% decrease noted in the third quarter.
In other recent news, Gartner reported robust financial results for the second quarter of 2024, including an 8% year-over-year increase in EBITDA, reaching $416 million, and a 13% growth in adjusted earnings per share to $3.22.
This performance has led to BMO Capital Markets revising its stock price target for Gartner to $510, up from the previous target of $450, while maintaining a Market Perform rating. Meanwhile, Baird continues to hold an Outperform rating on Gartner, expressing confidence in the company's growth potential despite current macroeconomic uncertainties.
The company's recent strategic initiatives include plans for sales force recruitment in the latter half of 2024. Gartner's full-year guidance has been updated, with research revenue projected to be at least $5.105 billion. The company also reported high-single-digit growth in contract value, exceeding expectations, and a 10% growth in contract value with enterprise function leaders in the research segment.
InvestingPro Insights
To complement Morgan Stanley's analysis of Gartner (NYSE:IT), recent data from InvestingPro offers additional context for investors. Gartner's market capitalization stands at $40.12 billion, reflecting its significant presence in the IT consulting and research sector. The company's P/E ratio of 49.04 indicates that investors are willing to pay a premium for its shares, aligning with the "InvestingPro Tip" that Gartner is trading at a high earnings multiple.
Despite the challenges noted in web traffic, Gartner has demonstrated strong financial performance. The company's revenue for the last twelve months as of Q2 2023 reached $6.06 billion, with a healthy gross profit margin of 67.78%. This robust profitability is further emphasized by an "InvestingPro Tip" highlighting that Gartner has been profitable over the last twelve months.
Investors should note that Gartner's stock is trading near its 52-week high, with a price that is 99.82% of its peak. This strength is reflected in the impressive 46.33% one-year price total return. However, potential investors should be aware that Gartner does not pay a dividend to shareholders, as pointed out by another "InvestingPro Tip."
For those seeking a more comprehensive analysis, InvestingPro offers 13 additional tips on Gartner, providing a deeper understanding of the company's financial health and market position.
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