European IT Services: BofA European IT Services Indicator: third consecutive sequential decline in May

Research evidence excerpt

European IT Services: BofA European IT Services Indicator: third consecutive sequential decline in May

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European IT Services

BofA European IT Services Indicator: third

consecutive sequential decline in May

Industry Overview

Indicator deteriorates sequentially in May 19 June 2026

The BofA European IT Services Indicator declined sequentially for the third consecutive Equity

month in May 2026 (see notes; Introduction to the Indicator and the BofA European IT Europe

Services Indicator April 2026). Three out of six components deteriorated sequentially IT services

(US CEO Confidence, global earnings revisions ratio and offshore hiring activity), which Aditya Buddhavarapu, CFA >>

we believe largely reflects concerns around the impact of the Middle East conflict, in line Research Analyst

with comments from Accenture F3Q results (see note; Read across from Accenture MLI+44 (UK)20 7995 7318

F3Q’26 results). The Indicator’s six-month moving average also deteriorated sequentially aditya.buddhavarapu@bofa.com

as a result. Historically, the Indicator leads average organic revenue growth of our basket Frederic Boulan, CFA >>

Research Analyst

(CAP, SOP, ATE) by three quarters. While our IT Services coverage has very limited direct MLI (UK)

exposure to the Middle East, we continue to look for commentary on any signs of +44 20 7995 7101

frederic.boulan@bofa.com

indirect impact. We expect our IT Services coverage to return to positive growth in

Vivek Vasudeo

2026E with 2.2% organic revenue growth on average, after two consecutive years of Data Science Rsch Analyst

negative growth. We favour scaled companies (Buy CAP) and niche providers with MLI (UK) +44 20 7995-3511

industry/ product specific capabilities (Buy NETC, SOP, Kainos).