'Rare Magnitude' For Accenture's Outlook Boost

Accenture Plc ACN shares gained more than 7 percent Thursday morning in a move driven by its increased outlook for 2015 revenue growth, an analyst said.

The Ireland-based consulting and outsourcing company expects revenue in the current year will increase between 8 percent and 10 percent, compared with its earlier outlook of between 5 percent and 8 percent.

"This magnitude of guidance increase is rare and should be enough to drive the stock higher," according to JP Morgan's Tien-tsin Huang, who maintained an Overweight rating on Accenture.

The company's latest forecast increases the estimated negative impact of foreign exchange to 8 percent, from its previous estimate of 5 percent.

For the second quarter ended February 28, the company posted net income growth of 2.9 percent to $743.2 million, or $1.08 per share. Revenue grew 5 percent to to $7.49 billion.

Accenture consulting segment saw revenue grow 13 percent to about half the company's total, which Huang called a "significant improvement."

The company's consulting business "remained firm," Huang said.

Accenture cut its 2015 adjusted earnings forecast slightly, to between $4.66 and $4.76 a share, from an earlier forecast of between $4.66 and $4.80 a share.

Wall Street expects 2015 adjusted earnings of $4.75 a share, although Huang said the Street consensus is likely "not updated for foreign exchange."

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorReiterationAnalyst RatingsJP MorganTien-tsin Huang
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!