Investors Awaiting Guidance From Accenture's Q4 Report

A week ahead of the fourth-quarter earnings announcement on September 29, UBS expects
Accenture PlcACN
to sign off the fiscal year 2016 on a strong note. However, investors' focus will be the outlook for the next fiscal year, which will dictate the stock's future.

Q4 Expectations

Analysts Michael Briest and Tal Grant expect Accenture to deliver sales revenue of $8.559 billion, which is better than the guided sales range of $8.25 billion–$8.5 billion for the fourth quarter. Similarly, they estimate EPS of $1.31 compared to the forecast of $1.26–$1.30. However, Street analysts expect the company to earn $1.30 a share on $8.43 billion revenue.

Related Link: Baird Says Accenture Getting More Interesting As Stock Nears $110

The company's EPS topped estimates in three of the last four quarters and failed to meet expectations in one quarter. There has been no change in consensus EPS estimates of $1.30 for the fourth quarter.

Conservative Forecast

The brokerage pointed out that history suggests Accenture will guide conservatively for fiscal year 2017. For instance, the company guided 5–8 percent constant currency growth at the start of the fiscal year 2016. The same was increased to 9.5–10.5 percent when the company reported third quarter results. 2014 was much the same.

"With acquisitions (already closed and anticipated) likely to add c200bp, a 6–9 percent or even 7–10 percent range seems plausible to us (cons. +7 percent to $35,014 million; UBSe +7 percent to $35,089 million). We are modelling just 10bp of margin expansion (cons. +20bp to 14.8 percent), although a 10–30bp range is likely," the analysts wrote in a note to clients.

The brokerage maintains its Neutral rating and target price of $115.

The stock traded at $111.67, up 0.88 percent at time of writing.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: Analyst ColorEarningsNewsPrice TargetPreviewsReiterationAnalyst RatingsTrading IdeasMichael BriestTal GrantUBS
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!

Loading...