欧洲IT服务：季度表现良好，但仍未满足投资者预期

European IT services: a good quarter, but still not enough forinvestors track have released their results for the quarter ending in March. This was the secondmajor wave of sales/earnings reports in the IT services sectors, following those of IndianITservices companies(link).ExceptCognizant (NC)andCGl (U,PTCAD141),mostUSITservices companies will publish in the coming two weeks. +33158980630derric.marcon@bernsteinsg.com +331421354 22richard.nguyen@bernsteinsg.com IT services companies, there was little disappointment surrounding the published figures.However,some investors were left wanting more, noting that despite a good (or even verygood)startto theyearformost of them,the companies left their annualtargets unchanged.While this debate may have fueled some discussions, we don't believe it warrants furtherattention, as it will be resolved in July. Indeed, we think that this is when the IT servicescompanies will raise theirtargets if the 1Q26trend continues into 2Q26 (as we expect),andif 2Q26maintains a moreorless similarmomentum,despiteanuncertain economic contextthat is more likely to deteriorate than improve as long as the blockade in the Middle Eastremains in place. Kiran Shah, CFA +442035471533kiran.shah@bernsteinsg.com Even thoughEuropean ITservices companysharesperformedslightlybetterthantheirIndian counterparts on the day of the earnings release, it was far from a firework display(somestocks even declined),despite extremelydepressedvaluationlevels formostEuropeancompanies.The lack of certaintysurroundingthe shape ofthe12moutlookisovershadowing the answers provided to bearish Altheories. In a sense, this might be ablessing in disguise, as it could mean that investors are refocusing on the real problemsfacing IT services companies:a volatile and uncertain economic environment, ratherthanunsubstantiated Al-related disruption theories. Our only slight reservation is that, in ouropinion,investorstoo often overlook whatcurrentshareprices arevaluing as a scenario-which is, implicitly, very little, if anything, at this level. Regarding what remains to come in the sector, which could be a game-changer in termsof investors'perception of the sector's medium-to long-term outlook,weforesee thefollowing:a)anupward revision ofFY26 forecasts as soon as companies publishtheir 2Qresults in July, if customer demand continues to defy macroeconomic headwinds linkedto the ongoing blockade in the Middle East (bearing in mind that at this stage GDP growthforecasts have not changed sincetheend of Januaryfor some countries -France, Germanyof sharebuyback programsby companiesthathavenotyet announcedthem (Alten's netit was saying just three months ago that it wouldn't); c) the contextualization of companies'medium-termgrowthpotentialthroughtheformalizationofgrowthtargetsoveratwo-orthree-yearhorizon INVESTMENTIMPLICATIONS All ratings confirmed and PT unchanged. The performance ofthe companies wetrack (which we do not necessarily cover) has been in linewith or above consensus expectations. glimmers of good news, the outbreak of war in the Middle East at the end of February and a still very uncertain economic/geopolitical environment could have led to fears that this trend would not continue at the beginning of 2026.This has not beenthe case, hencethe flood ofgood publications. Source: Factset, Bernstein analysis VIRTUALLYNOCHANGETOFY26OBJECTIVES Except for Atos, all the IT services companies have confirmed their FY26 objectives. But that's not the main point of these publications, in our opinion. What struck us most was the progress made in 1Q26comparedtothecompanies'annualtargets.Aubay,Sopra Steria,and Capgeminiclearlyindicatedthattheir1Q26performancewas betterthantheirown expectations. AlthoughSopra Steria did not quantifythe extent to which it had outperformed its own forecasts (only speaking of the slight leadgained thanks to 1Q26 compared to its annual targets), we estimate that Capgemini and Aubay's sales exceeded their forecastspredictability of theoutcome over such a shortperiod tobe highforan IT services company. The main elements that stood out to us are the following: in the Middle East (luxury goods, air transport, hospitality),the rest of the demand continued to grow compared to its level atthe end of 2025.This is rather reassuring,as there is rarely a catch-up effect at the beginning of the year (asmayhave beenthe case in 2H25 after a sluggish 1H25 in terms of IT service spending), given that customers generally prefer to start theyear cautiously and budgets may sometimes be released late. In the end, even if therebound in demand is not uniform andthelatter remains volatile, all players observed a better market situation at the beginning of 2026 than in 2025 (in itself onlyhalf surprising since it is linked to the improvement in the economic situation and a very strong innovation cycle driven by Al). security,this is a continuation of what we already observed in 2025.For others, like aerospace, it