Citi On Accenture: 'Good Execution But Priced In'

Despite reporting better-than-expected earnings and strong bookings, Citi expects
Accenture PlcACN
shares to be range-bound and maintains its Neutral rating, as it believes the good execution is already priced in to the stock.

Accenture finished 2016 with a strong 9 percent growth rate in the fourth quarter, driven by Consulting, "the New" (digital, cloud, security), and the products segment.

"Much as we admire and applaud Accenture's track record of performance, we are unwilling to recommend that new money be put to work in a name that delivers ~10 percent EPS CAGR but trades at 20x forward earnings," analyst Ashwin Shirvaikar wrote in a note.

Related Link: Accenture The Best House In A Tough Neighborhood

In fact, Shirvaikar prefers focused emerging technology plays such as EPAM Systems Inc EPAM or platform plays such as WNS (Holdings) Limited (ADR) WNS and Amdocs Limited DOX.

In the large cap space, the analyst would put his money on Cognizant Technology Solutions Corp CTSH that "deliver comparable total return at a considerably cheaper multiple."

Meanwhile, the positives in Accenture's results include no FX impact in guidance, strong performance and commentary in Financial Services, and dividend increase. On the flip side, the company Indicated decelerating growth for all operating segments.

However, Shirvaikar raised his price target to $120 from $116 on the increased EPS.

Shares of Accenture were seen trading at $122.57, up 0.76 percent, at time of writing. Cognizant was down 14.95 percent at $46.73.

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 with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Posted In: Ashwin ShirvaikarCitiAnalyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsTech

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.