Shares of Accenture plc ACN hit a new 52-week high of $94.98 on Mar 26 and eventually closed at $94.17. The closing price represents a robust one-year return of 19.5% and a year-to-date return of 5.4%.
Average volume of shares traded over the last three months is roughly 2,620K. This Zacks Rank #3 (Hold) stock looks set to perform well in the future with expected long-term earnings per share (EPS) growth rate of 9.6%.
Share Price Drivers
Accenture’s stock price has moved up 6.8% since the company announced better-than-expected second-quarter fiscal 2015 results on Mar 26. As the company reported strong year-over-year increase in both earnings and revenues, it managed to surpass expectations. The earnings release helped drive the company’s shares to a new 52-week high during the trading session yesterday.
The company posted earnings of $1.08 per share for the second quarter, which increased 4.8% from the year-ago quarter figure of $1.03 and beat the Zacks Consensus Estimate of $1.07. The year-over-year increase was attributed to higher revenues, higher non-operating income and lower share count.
Accenture’s second-quarter net revenue increased 5.1% year over year to $7.49 billion and surpassed the Zacks Consensus Estimate of $7.35 billion. Net revenue also came in line with the higher end of management’s guided range of $7.25 to $7.50 billion, primarily aided by a 6% increase in Outsourcing revenues ($3.65 billion) and a 4% increase in Consulting revenues ($3.84 billion).
Buoyed by better-than-expected second-quarter results, Accenture raised its revenue guidance for fiscal 2015. The company now expects net revenue to grow in the range of 8% to 10% in local currency compared with the previously guided range of 5% to 8%. Furthermore, for the third quarter of fiscal 2015, Accenture expects net revenue between $7.35 billion and $7.60 billion.
Accenture continues to reward shareholders with consistent dividends and share repurchases. The company repurchased 6.8 million shares for $601 million during the second quarter. The company declared a semi-annual cash dividend of $1.02 per share during the quarter.
Some of the optimism related to Accenture shares may be attributed to the recently completed acquisition of Agilex Technologies, Inc., a provider of digital solutions. The acquisition aims at enhancing Accenture’s digital capabilities in analytics, cloud and mobility for federal government.
Nevertheless, we remain slightly cautious about the stock due to increasing competition from Cognizant Technology Solutions Corp. CTSH and International Business Machines, and Accenture’s broad European exposure, which may impact growth.
Other Stocks to Consider
Other technology companies that surged to their 52-week highs yesterday include Red Hat, Inc. RHT and HC2 Holdings, Inc. HCHC, reaching $76.70 and $13.28, respectively.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment