Market Overview

4 Tech Companies Seeing High Demand For Blockchain Services

4 Tech Companies Seeing High Demand For Blockchain Services
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KeyBanc Capital Markets is increasingly positive on blockchain following a recent investor events and projects the services market will grow to $11 billion by 2022.

The sell-side firm highlighted Accenture Plc (NYSE: ACN) and IBM (NYSE: IBM) as two companies that are well-positioned for the trend. 

The Analyst

Analyst Avind Ramnani reiterated an Overweight rating and $181 price target for Accenture shares and a Sector Weight rating on IBM with no assigned price target. 

The Thesis 

Accenture has seen the greatest demand for its financial, supply chain logistics and digital identity management services, Ramnani said in a note. 

The consulting firm has partnered with several companies including Anheuser Busch Inbev (NYSE: BUD) and Kuehne + Nagel to transition the entire documentation process to entirely blockchain-driven solutions, the analyst said.

Accenture has demonstrated its solution can significantly increase efficiency and decrease risk, Ramnani said. 

Accenture has also been working to develop blockchain for interbank payments, which will allow financial service companies to seamlessly integrate with their non-bank partners, according to KeyBanc. 

IBM has been creating products in the same areas and fortified its position as a leader in the field by launching a number of partnerships, Ramnani said. 

One notable collaboration is with Walmart Inc (NYSE: WMT). The two companies have developed a solution to increase the safety and efficiency of Walmart’s food supply chain by enabling it to verify the source and quality of merchandise at any point in the chain, the analyst said. 

“Foodborne illnesses can now be tracked to the point of origination within a matter of seconds, as opposed to days." 

Blockchain will have similar applicability in the health care sector, Ramnani said: pharmaceutical companies could use the technology to better track raw materials, ensuring that any tampering in the process is traceable in mere seconds.

Besides Accenture and IBM, Ramnani also noted high demand for blockchain consulting services from EPAM Systems Inc (NYSE: EPAM) (Overweight, $143 price target) and Luxoft Holding Inc (NYSE: LXFT) (Overweight, $56 price target).

Price Action

Accenture shares were up 0.36 percent at the time of publication Friday, while IBM was up 0.12 percent. 

Related Links:

Brian Kelly Introduces An Active Blockchain ETF

Alex Mashinsky: The Largest Blockchain Companies Will One Day Be Larger Than Apple, Google

Latest Ratings for ACN

Sep 2018Credit SuisseMaintainsNeutralNeutral
Sep 2018BairdMaintainsNeutralNeutral
Sep 2018Bank of AmericaMaintainsNeutralNeutral

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