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Accenture PLC Class A - Stock Quote ACN

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Morningstar's Accenture PLC Class A Stock Analysis

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Accenture Beats Guidance as Demand Remains Rampant, Faces Wage Inflation; Maintaining FVE of $258

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Wide-moat Accenture reported strong second-quarter results, surpassing both management’s and our top-line expectations due to broad-based growth as all 13 industry groups grew double-digits from the prior year coupled with new bookings near $20 billion. Accenture’s growth was across industry, geography, and deal-sizes, indicative of the hyper-growth environment spurred by the accelerated digital transformation throughout all geographies. The current macroeconomic environment has enabled Accenture to improve its pricing power, which showed up in its top line. With that said, increased demand is correlated with increased hiring. Its workforce grew by 24,000 people for the quarter, which weighed on margins as wage inflation has increased. Although Accenture achieved top-line growth and increased its fiscal-year guidance, we view the macroeconomic factors, such as wage inflation, as a notable weight on margins. As such, we are maintaining our fair value estimate of $258 per share. After earnings results were announced, the stock is down around 1% to $321, making Accenture still overvalued, in our view.

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Accenture PLC Class A's Company Profile

Business Description

Accenture is a leading global IT-services firm that provides consulting, strategy, and technology and operational services. These services run the gamut from aiding enterprises with digital transformation to procurement services to software system integration. The company provides its IT offerings to a variety of sectors, including communications, media and technology, financial services, health and public services, consumer products, and resources. Accenture employs just under 500,000 people throughout 200 cities in 51 countries.

1 Grand Canal Square, Grand Canal Harbour
Dublin, 2, Ireland
T +353 16462000
Sector Technology
Industry Information Technology Services
Most Recent Earnings Feb 28, 2022
Fiscal Year End Aug 31, 2022
Stock Type
Employees 699,000

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