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Accenture Could Hit New All-Time High on Strong Q3 Earnings; Target Price $309

Accenture, a global IT Services company that leverages a global workforce to provide consulting and outsourcing services to companies worldwide, is expected to report its fiscal third-quarter earnings of $2.24 per share, which represents year-over-year growth of about 18% from $1.90 per share seen in the same period a year ago.

The U.S-based IT giant would post year-over-year revenue growth of over 16% to $12.79 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of about 4%.

According to Jefferies, revenue and earnings have the potential to grow at a high single-digit pace in the next few years amidst favorable secular trends. The company is on pace to generate $50 billion in revenues in calendar 2021, up 14% year-on-year.

Accenture’s better-than-expected results, which will be announced on June 24, would help the stock hit new all-time highs. Accenture shares rose over 7% so far this year.

Analyst Comments

“We expect strong outperformance & broadly positive tone on demand and its ability to manage tight talent to drive shares higher. Accenture (ACN) is the biggest boat in a rising tide as a robust Services spend recovery has materialized. Valuation remains premium, yet shares have underperformed in recent weeks. We raise estimates to the high end of guides & increase price target to $305,” noted Bryan C. Bergin, equity analyst at Cowen.

Accenture Stock Price Forecast

Eight analysts who offered stock ratings for Accenture in the last three months forecast the average price in 12 months of $309.00 with a high forecast of $329.00 and a low forecast of $288.00.

The average price target represents 9.87% from the last price of $281.25. Of those eight analysts, seven rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $305 with a high of $400 under a bull scenario and $200 under the worst-case scenario. The firm gave an “Overweight” rating on the IT Services company’s stock.

“Industry-wide supply headwinds are hard to ignore, but demand checks remain robust this quarter and project travel looks to be returning. While attrition likely moves higher in the quarter, ACN is among the best-equipped to manage through potential challenges,” noted James E Faucette, equity analyst at Morgan Stanley.

“With demand checks pointing to continued strength, we are moving our 3Q21 revenue estimate ahead of consensus, with our revised 3Q21 revenue / EPS now $12.828bn / $2.26 vs. consensus expectations of $12.783bn / $2.24. Our 4Q21 estimates, which contemplate some resumption of client-related travel, remain unchanged at $12.741bn / $2.08 vs. consensus expectations of $12.483bn / $2.04. This moves our FY21 revenue / EPS estimates to $49.42bn / $8.54 (vs. $49.344 / $8.53 prior), ahead of the Street’s $49.071bn / $8.53.”

Several other analysts have also updated their stock outlook on Friday. Jefferies initiated with a hold rating and a $309 target price. Cowen and company raised the price objective to $305 from $290. BMO lifted the target price to $302 from $292. RBC upped the price target to $301 from $278.

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This article was originally posted on FX Empire


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