Accenture (ACN): How Long Can It Last? - Bernstein

Bernstein analyst, Lisa Ellis, noted that Accenture plc (NYSE: ACN) reports 3Q16 earnings before market open on Thursday, June 23. Accenture has grown revenues above 7% in constant currency (Accenture's 13-yr average top line growth rate) for eight straight quarters, including the past six >10%, and has raised full-year revenue guidance twice already this fiscal year (from 5-8%, to 6-9%, to 8-10% as of 2Q). With the stock already reflecting elevated expectations – Accenture's multiple has expanded >10% in the past year, is in the 98th percentile absolute on a 5-year basis, and implies a 20x multiple on consensus 1-yr out, 1-yr forward earnings – and the inherent limitations on scalability in the IT Services market (a linear relationship between headcount and revenues), the critical question for Accenture right now is: "How long can it last?"

No change to Market Perform rating but the analyst ups her price target to $112.00 (from $104.00), still $7 below the current trading price.

For an analyst ratings summary and ratings history on Accenture plc click here. For more ratings news on Accenture plc click here.

Shares of Accenture plc closed at $119.05 yesterday.

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