Accenture Scales to New Record High Ahead of Q1 Earnings; Target Price $410 in Best Case
Accenture, a global IT Services company that leverages the global workforce to provide consulting and outsourcing services to companies worldwide, is expected to report its fiscal first-quarter earnings of $2.62 per share, which represents year-over-year growth of over 20% from $2.17 per share seen in the same period a year ago.
The U.S-based IT giant would post year-over-year revenue growth of about 21% to $14.21 billion. In the last two years, the company has beaten the earnings per share (EPS) almost all the time.
Better-than-expected results, which will be announced on Thursday, Dec 16, would help the stock hit a new all-time high. Accenture stock hit a record high of $381.10 on Monday. The stock surged nearly 45% so far this year.
“Solid momentum supports a strong FY22 start. Channel strength is broad-based & ACN’s leading scale/offering yields benefits from accelerated IT modernization. That said, short-term risk-reward is less attractive in our view as 1Q outperformance is broadly expected, shares have held up well amid broader market volatility & retain near-record valuation. No fundamental change, but worth the wait,” noted Bryan C. Bergin, equity analyst at Cowen.
Accenture Stock Price Forecast
Fourteen analysts who offered stock ratings for Accenture in the last three months forecast the average price in 12 months of $384.93 with a high forecast of $410.00 and a low forecast of $350.00.
The average price target represents a 1.83% change from the last price of $378.00. Of those 14 analysts, 11 rated “Buy”, three rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley gave the base target price of $400 with a high of $500 under a bull scenario and $265 under the worst-case scenario. The firm gave an “Overweight” rating on the IT Services company’s stock.
“Checks continue to point to limited bench, strong demand, and ‘oversold’ projects. While attrition likely remains relatively elevated, Accenture (ACN) is among the best-equipped to continue hiring ahead of demand,” noted James Faucette, equity analyst at Morgan Stanley.
“Our F1Q22 revenue / EPS of $14.125bn / $2.58 remain intact, as better demand offsets what we believe is a (0.3%) FX headwind in the quarter (vs. management’s +0.5% tailwind). Our FY22 revenue / EPS estimates of $57.128bn / $10.15 are also unchanged, though current rates suggest FX may be an approximate (2%) headwind in FY22 vs. management’s contemplated (0.5%) headwind.”
Several other analysts have also updated their stock outlook. Susquehanna raised the target price to $435 from $386. Evercore ISI lifted the target price to $410 from $364. In September, BMO increased the price target to $385 from $330.
Technical analysis suggests it is good to buy as 100-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.
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