BMO Capital has lowered its price target on Gartner Inc. (IT) to $188.00 from $258.00 and kept its Market Perform rating on the shares. The change follows a recent steep drop in the stock’s market value, with shares down 27.47% over the past week and off 71.55% year-over-year. According to InvestingPro data, the stock’s relative strength index (RSI) indicates it is in oversold territory.
The analyst noted that Gartner’s most recent results included a margin-driven earnings beat, a performance the research firm said was partly supported by a reduced share count as management has been an active repurchaser of stock. On a trailing basis, Gartner’s earnings per share stand at $11.54, corresponding to a price-to-earnings multiple of 13.73.
Despite the upside to margins, BMO pointed to ongoing issues with contract value growth - a key revenue-quality metric - citing churn among federal government clients and an overall challenging environment for new sales. Gartner’s leadership has laid out a four-dimensional plan intended to restore CV growth, but management has warned that realizing the full benefit of those initiatives is likely to take "a couple of years."
Gartner’s guidance for 2026 was characterized by the company as "at least" guidance, but the projection arrived below consensus expectations. Management expects contract value growth to pick up as the year progresses, according to the commentary summarized by BMO. Following these developments, BMO trimmed its own estimates for the company alongside the reduction in the price target.
Market reaction to the company’s most recent quarterly release has been mixed. Gartner reported fourth-quarter 2025 adjusted earnings per share of $3.94, beating the $3.51 consensus forecast. Nonetheless, several sell-side firms have pared back their outlooks: Truist Securities lowered its price target to $170, citing fourth-quarter contract-value results that underperformed expectations; RBC Capital reduced its target to $175, pointing to moderating contract value growth that slowed to 4% from 6% in the prior quarter when excluding government contracts.
RBC also flagged deterioration in wallet retention and a mid-single-digit decline in new business, reinforcing concerns about the trajectory of CV momentum. Taken together, the analyst adjustments and management’s cautious timeline for CV recovery help explain recent price action and the reassessment of valuations among research firms.
Key points
- BMO lowered Gartner’s price target to $188 from $258 and maintained a Market Perform rating; the firm reduced its estimates for the company.
- Shares have fallen sharply - down 27.47% in a week and 71.55% year-over-year - and the RSI reads as oversold per InvestingPro data.
- Analysts at Truist and RBC also cut targets to $170 and $175, respectively, citing weaker-than-expected contract value results, slower CV growth, lower wallet retention and declines in new business.
Risks and uncertainties
- Contract value growth may remain constrained for an extended period due to federal government customer churn - a direct risk to revenue quality in the enterprise and government services sectors.
- Execution risk around the management’s four-dimensional plan - management itself expects the plan’s benefits to materialize over "a couple of years," creating near-term uncertainty for investors focused on faster CV recovery.
- Continued declines in wallet retention and new business could further depress growth metrics and pressure valuations across research and advisory peers.
Conclusion
BMO’s move to cut its price target and lower estimates reflects persistent challenges in restoring contract value growth at Gartner despite margin resilience and share-repurchase activity. While the company beat on fourth-quarter earnings, the market and a number of sell-side firms remain cautious given softer CV trends, government client churn and management’s measured timeline to revive growth.