Accenture (ACN) Stock Gains on Positive Analyst Note

NEW YORK (TheStreet) -- Shares of Accenture  (ACN) are gaining 0.21% to $99.69 after its price target was raised to $101 from $92 at Barclays which maintained its "equal weight" rating.

Accenture continues to demonstrate its ability to deliver critical solutions as well as emerging technology offerings, offsetting the more commoditized businesses, Barclays noted.

"In our view, the growth rates of both the digital and non-digital revenue are sustainable in the near term and support a slightly higher multiple than we used previously for valuation," Barclays analysts said.

Accenture reported earnings of $1.30 a share for the fiscal third quarter yesterday, above analysts' estimates of $1.23 a share for the quarter. Revenue grew 0.4% year over year to $7.77 billion for the quarter, above analysts' estimates of $7.55 billion.

Additionally, the company expects to report revenue of $7.45 billion to $7.7 billion for the fiscal fourth quarter, compared to analysts' estimates of $7.58 billion for the quarter. For more on its earnings results, click here

Accenture is engaged in providing management consulting, technology and outsourcing services.

Separately, TheStreet Ratings team rates ACCENTURE PLC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate ACCENTURE PLC (ACN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 22.5%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ACN's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.27, which illustrates the ability to avoid short-term cash problems.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 2.9% when compared to the same quarter one year prior, going from $671.30 million to $690.73 million.
  • Net operating cash flow has slightly increased to $301.29 million or 3.04% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.72%.
  • You can view the full analysis from the report here: ACN Ratings Report

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