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Investing.com --UBS downgraded Gartner (NYSE:IT) Inc to Neutral from Buy and cut its price target sharply to $270 from $480, citing a significant miss in second-quarter contract value (CV) growth and a reset in expectations for 2025 and 2026.
The firm said Gartner’s Q2 ex-Federal net contract value increase (NCVI) was just $8 million far below its $59 million estimate leading to a roughly 100 basis point cut to its CV growth trajectory.
UBS now sees Gartner exiting 2025 with a CV growth rate of 2.5%, down from 5.1% previously, and trimmed its 2026 organic growth forecast to 3% from 6%.
Because CV is a sequentially compounding metric, the Q2 shortfall drags down estimates for the next three quarters.
UBS said the reset makes it difficult to build near-term conviction despite the stock appearing inexpensive on 2026 multiples, 12x EBITDA and 16x free cash flow.
UBS attributed the softness to broader cuts in discretionary enterprise spending rather than AI disruption but warned that a recovery will likely take time.
It also flagged that its 2026 estimates still embed a modest reacceleration, suggesting potential further downside risk.
While Gartner remains well positioned over the long term, UBS sees limited near-term upside as growth continues to decelerate through the fourth quarter.