Gartner (IT) faces low Street expectations for Q3 contract value growth that a total beat is possible even as weakness outside the federal business persists, UBS said in a Monday note.

UBS said a beat could help the stock sustain its recent momentum, even though some investors view the recent strength as a squeeze or bounce, adding that continued ex-federal softness will likely perpetuate the longstanding bear narrative.

The firm said it expects total contract value growth of 2.5% in Q3, versus the Street's 2.3%. It cut its ex-federal net contract value increase estimate to $45 million from $60 million prior, citing a difficult renewal and selling environment, while a moderate recovery in the federal business offsets some of the weakness.

UBS expects Gartner to raise its 2026 earnings before interest, taxes, depreciation and amortization as well as earnings per share guidance, primarily due to margin contingency, and sees a modest increase in the revenue guide. It also expects a noticeably lower pace of share buybacks in Q3.

UBS maintained it neutral rating and raised its price target to $208 per share from $196.

Price: 185.71, Change: +0.91, Percent Change: +0.49