02:43 PM EDT, 07/31/2025 (MT Newswires) -- CGI's (GIB) fiscal Q3 revenue was aided by favorable foreign exchange movements that also lifted adjusted earnings slightly above estimates, RBC Capital Markets said.

While constant currency organic growth remained slightly negative at -0.5%, it improved from Q2, with growth in Europe and the US exceeding expectations and the managed services pipeline showing further strength, according to the note Wednesday.

The firm said recent acquisitions contributed to top-line growth but diluted margins year over year. CGI expects margins to expand as integration and restructuring efforts progress.

"Despite negative organic growth, Q3 adjusted EPS rose 10% year-over-year, primarily due to the contribution from acquisitions," the firm added.

The firm raised its adjusted EPS estimates to CA$8.29 ($5.98) from CA$8.22 for fiscal 2025 and CA$9.12 from CA$8.96 for 2026, and now forecasts revenue of CA$16.0 billion from CA$15.9 billion for fiscal 2025 and CA$17.0 billion from CA$16.7 billion for 2026, citing foreign exchange tailwinds, improved organic growth, and better acquisition contributions.

RBC maintained an outperform rating on the stock and cut its price target to CA$175 from CA$185.

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