Accenture Posts Better-Than-Expected Q3 Results; Shares Rise


Shares of consulting and processing services provider Accenture (ACN) opened around 4% higher on Thursday following the release of impressive numbers for the third quarter of Fiscal 2021 that ended May 31.

The company reported earnings of $2.40 per share, higher than the $2.23 per share estimated by analysts. Also, it marks a 26% improvement from $2.44 recorded in the same quarter last year.

Quarterly revenues came in at $13.3 billion, which surpassed analysts’ estimates of $12.5 billion, up 21% from the year-ago period.

Notably, new bookings witnessed 39% growth from the last year’s quarter to $15.4 billion, along with consulting bookings of $8 billion (up 30%) and outsourcing bookings of $7.4 billion (52%). (See Accenture stock chart on TipRanks)

CEO of Accenture, Julie Sweet, said, “Our outstanding financial results reflect our continued momentum driven by the demand for digital transformation, the depth and breadth of our client relationships with the world’s leading companies, our talented people and the strength of our business across geographic markets, industries and services.”

On assumptions of another 0.5% favorable impact of foreign exchange on results, the company expects fiscal 2021 revenue growth to be in the range of 10% to 11% in local currency, compared with 6.5% to 8.5% previously guided.

GAAP EPS is anticipated to be in the range of $9.07 to $9.16, compared with $8.67 to $8.85 previously.

On June 21, Jefferies analyst Surinder Thind initiated a Hold rating on the stock with a price target of $309 (5.4% upside potential).

Thind noted, “Given the company’s scale and strong competitive positioning, ACN warrants consideration as a core holding. However, for potential new investors, there may be better opportunity elsewhere within the IT Consulting group to earn higher returns in the year ahead.”

“Revenue and earnings have the potential to grow at a high single digit pace the next few years amidst favorable secular trends,” he added.

Consensus among analysts is a Strong Buy based on 7 Buys and 2 Hold. The average Accenture analyst price target of $311.78 implies upside potential of 7% from current levels. Shares of the company have gained 41.6% over the past year.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Accenture is currently Positive, as the cumulative change in holdings across all 13 hedge funds that were active in the last quarter was an increase of 13,100 shares.

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