Digital Download – Services on sale

Research evidence excerpt

Digital Download – Services on sale

ini which fell SAP BUY

7%. If we treat SBC as a theoretical wage cost, then we estimate Accenture now trades on Dec SCT HOLD

27 FCF yield of 12.1%. Capgemini now trades on a premium at 11.2%. That premium widens SGE BUY

further on an unlevered basis, with Capgemini on 9.7% vs Accenture on 11.8% (though cons . TEMN BUY

may not have fully updated for the most recent results). Source: Jefferies

Accenture read across: Accenture is a sector bellwether and as a result, we highlight the

following points of interest. Chart 3 - Weekly Share Performance, 2026YTD

15.0%

SAP - Accenture noted that clients "with more advanced digital cores are starting to take 10.0%5.0%

on larger AI programs". We think this is a supportive comment for the ongoing digital 0.0%

transformation and shift to S4 at SAP. -10.0%-5.0%

Macro - Middle East disruption impacted Accenture's revenues by $100m and orders by .Source: Jefferies, Factset

$400m. We think Middle East concerns are less acute now than 3 months ago. That said, even

now, it is unclear whether Iran has opened or shut the Strait of Hormuz. We doubt Accenture

will be the only company referencing the Middle East as we work through 2Q results season.

M&A - Accenture announced 3 deals worth $4.2bn, equivalent to 20x ARR. These deals

were described as being dilutive and are more software like in characteristic. We think this

highlights a blurring of the battle lines. AI is forcing Services companies to move into Software.

Meanwhile, Software is leaning more on Services, for instance SAP is giving FDE services away

to key customers. Co-operation between Software and Services is morphing into Co-opetition.

Business model change - Accenture noted "we are shifting to more non-FTE commercial

models over time".