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Gold/Mining/Energy : CGI Group (GIB.A) - -- Ignore unavailable to you. Want to Upgrade?

To: Luc Glinas who wrote (413)	5/27/1998 12:37:00 PM
From: David M. Lomow	Read Replies (2) \| Respond to of 1673

Here is the latest from Scotia McLeaod Sorry about the formating but I cut it from from browser and it is an Acrobat file, so it is missing the graphs and graphics DL 1-Strong Buy Ralph Garcea 416-863-7177 Further Outsourcing Opportunities - Target Raised! May 25, 1998 (6:45pm) 1-Yr. Target: $40.00 1-Yr. ROR: 33% Sh. O/S: 57.1 mln (f.d.) Post Bell Sygma Sh. O/S: 65.7 mln (f.d.) Sept. 30 1997A 1998E 1999E 2000E Qtr Q-EPS Q-CFPS EPS $0.10 $0.30 $0.61 $0.92 97Q2 $0.02 $0.05 P/E 300.0x 100.0x 49.2x 32.6x 97Q3 $0.03 $0.09 Sales/Share $2.99 $6.1 $10.17 $13.22 97Q4 $0.04 $0.11 P/S 10.0x 4.9x 2.9x 2.3x 97Q1 $0.05 $0.14 98Q2 $0.05 $0.14 98Q3E $0.07 $0.15 DEVELOPMENTS: úIn our previous comment (May 11/98), we mentioned the strengthened relationship between BCE/CGI and the fact that the "bidding" backlog ($3 billion) does not include any possible outsourcing or systems integration business from other members of the BCE family (BCI, Nortel, etc.). úIn addition, the possibilities of further consolidation in the financial services industry (insurance, etc.) increase the outsourcing opportunities for CGI Group - especially in the cross-selling of retail banking services to insurance clients. úOnce again, we reiterate our view that we see strong demand for information technology services well into the next century - both in North America and Europe. SHARE IMPACT AND VALUATION: úWe continue to remain bullish on CGI's long-term outlook. With U.S. and European comparables trading in the 2.0x-6.0x range, we have decided to take a P/S multiple in the middle of the comparable range. Thus, using a P/S multiple of 4.0x on FY 1999 sales/share of $10.17 yields a 12-18 month target of $40.00. We continue to recommend CGI a 1-Strong Buy, medium risk.