Guidance warning season

AIR Capital

Despite rising geopolitical risk, European corporate guidance has yet to reflect the potential economic impact. In AIR’s recent management meetings, discussion focused almost entirely on AI, with little attention paid to the Iran conflict despite surging energy prices and supply-chain stress that historically drive earnings revisions. The combination of unpriced macro risk and AI-driven sectoral disruption creates a credible basis for expecting a meaningful wave of 2026 earnings guidance revisions across European equities in the coming weeks. And the performance gap between the companies on the right side of these structural shifts and those on the wrong side will broaden. Stock winners include AI infrastructure beneficiaries such as Arm, Elmos, Aixtron and STM, alongside defence exposure at Exosens and Indra Sistemas. Euronext and Auto1 are also seen as largely insulated. Under pressure are Stroeer, Freenet and SES. In IT services, the sector is splitting between “The Conquerors” (Accenture, Cognizant, Reply) and “The Endangered” (Capgemini, Atos, Sage, Dassault Systemes, SAP).

- 20 March, 2026

Capgemini (CAP FP) France

Technology

GR20 Research

CAP's share price has shown weakness since the announcement of a below-consensus guidance for FY25, highlighting concerns about its underperformance compared to peers and the delayed recovery of the IT services industry. Its revenue mix, with significant exposure to manufacturing in Europe, limits its growth compared to offshore competitors like TCS, Infosys and Cognizant, which are benefitting from recovery in financial services. Despite AI creating high expectations, its impact on bookings remains limited, causing delays in decision-making; however, AI presents significant opportunities in IT services as it drives demand for business transformation.

- 07 March, 2025

Cognizant Technology Solutions Corp (CTSH)

Technology

Woozle Research

Respondents that directly procure from Cognizant have noted spending levels marginally ahead of estimates. It appears that the re-acceleration in IT spending levels has been slower than initially expected. There has been a noticeable decline in spending on onshore advisory services, which was partially offset by growth in offshore services, particularly in the managed service space, which has largely played into Cognizant’s hands, which have been extremely reactive in pivoting to offshore delivery. Cognizant has bolstered its presence in AI and Cybersecurity.

- 14 June, 2024