Gartner's Contract Value Growth Slows Amid Tariffs and DOGE Concerns, RBC Warns

Gartner faces slowing contract value growth due to tariff and DOGE headwinds, according to RBC. The company specializes in IT and communication technologies, with research and analysis services accounting for 82.7% of net sales. Net sales are primarily generated in the US and Canada, followed by Europe and other regions.

RBC Capital initiated coverage on Gartner (NYSE: IT) with a Sector Perform rating and a price target of $263.00, reflecting the IT services giant's significant decline of nearly 50% over the past year . The research firm acknowledged Gartner's global leadership in IT research and advisory services, noting its powerful network effect and successful land-and-expand strategy, which has driven double-digit Contract Value (CV) growth over the past decade. However, RBC Capital expressed concern over moderating CV growth due to headwinds from tariffs and the DOGE cryptocurrency .

Gartner's recent earnings report for the second quarter of 2025 showed positive results, with adjusted earnings per share (EPS) of $3.53, surpassing analyst expectations of $3.30. Revenue reached $1.7 billion, marking a 6% increase from the previous year. Despite these positive earnings, Gartner's stock experienced a notable decline in pre-market trading . Wolfe Research recently initiated coverage on Gartner with a Peerperform rating, setting a year-end 2026 price target range of $240 to $300 .

RBC Capital's cautious stance on Gartner is influenced by potential Generative AI disintermediation risks and the need for a reacceleration in CV growth before taking a more positive stance on the stock. Gartner's stock performance has underperformed compared to the S&P 500's 9.8% gain this year, highlighting the challenges the company faces .

References:
https://ng.investing.com/news/analyst-ratings/rbc-capital-initiates-gartner-stock-coverage-with-sector-perform-rating-93CH-2097327