MS upgrades Capgemini to 'equal-weight' as concerns are 'better encapsulated' after tech stocks selloff

Capgemini SE

19/02/2026 08:26

** Morgan Stanley upgrades French IT services firm Capgemini CAPP.PA to "equal-weight" from "underweight", citing a more balanced risk-reward after recent share price weakness

** Capgemini is down 26% year-to-date and has been hit by the recent global software stocks selloff on AI fears

** The upgrade comes despite a price target cut to EUR 117, as the broker says its core thesis on the company remains broadly unchanged despite the rating change

** The brokerage states that "structural AI disruption risk continues to cloud over the mid to long-term", limiting revenue growth and margin expansion prospects

** MS is also cautious on free cash flow, a key financial metric, noting a new restructuring plan will weigh on generation in the coming years and keep it below consensus

** The broker believes the stock's significant price decline means risks are now "better encapsulated", leading to the more balanced view despite the underlying concerns

** Shares of Capgemini SE CAPP.PA up 1.6% to €106.95 at 08:23 GMT

 (Reporting by Leo Marchandon in Gdansk)

 ((leo.marchandon@thomsonreuters.com))