Capgemini Dips Nearly 4% Following Morgan Stanley Downgrade
Capgemini's stock fell by 3.94% this Monday to EUR 144.90 after Morgan Stanley downgraded the stock to underweight and lowered the price target to EUR 142, citing concerns about the organic growth outlook for 2026 now expected at 2.5% compared to 4.5% a year earlier.
Morgan Stanley's Downgrade Impact
This Monday, Morgan Stanley downgraded Capgemini from market-weight to underweight and reduced its price target from EUR 145 to EUR 142, citing concerns about the company's organic growth trajectory, particularly after the acquisition of WNS in the fourth quarter of 2025. The American bank highlights that the organic growth expectations for 2026 have been reduced to 2.5% from 4.5% a year ago. Analysts believe there is no path to further expansion of valuation multiples. This recommendation comes as the stock was trading close to its major technical resistance at EUR 151.85 the day before, after having increased by nearly 3% over a week and more than 21% over three months. Morgan Stanley notes that Capgemini's decision to stop directly publishing organic growth in 2025 will make it more difficult to analyze trends of acceleration or sequential slowdown. The stock is now trading at EUR 144.90, below its 20-day moving average of EUR 145.57, but remains above the 50-day (EUR 138.18) and 200-day (EUR 134.82) moving averages. The RSI at 57 indicates a neutral situation, dismissing any oversold signal despite the day's correction.
Monday's Decline Erases Recent Gains
Monday's decline wipes out some of the gains recorded since the beginning of the year. The stock had risen 2.31% on January 9th, closing at EUR 150.85 and flirting with the resistance at EUR 151.85. The 3.94% drop brings the price close to its 20-day moving average, a first technical support to watch. The MACD, with a line at 2.29 slightly above its signal line at 2.26, displays a positive but thin histogram (0.03), suggesting a weakening of the bullish momentum. The upper Bollinger band, located at EUR 151.78, is no longer immediately reachable, while the lower band at EUR 139.36 provides a safety cushion of nearly 4% below the current prices. Fundamentally, investors remain on hold before the release of the annual 2025 results scheduled for February 13th, a crucial appointment after the revised growth targets announced in November. The group had then raised its growth forecast at constant exchange rates between 2% and 2.5%, driven by demand in cloud and artificial intelligence. J.P. Morgan maintains a neutral recommendation with a target at EUR 155, while Grupo Santander keeps an outperform rating. The share of capital traded this Monday stands at 0.06%, a very moderate level reflecting a selective investor reaction to Morgan Stanley's note.
