Accenture "Enhancing Cybersecurity with NOW Partnership" (Buy) McVeigh

Research evidence excerpt

Accenture "Enhancing Cybersecurity with NOW Partnership" (Buy) McVeigh

Forecast returns

Forecast price appreciation 118.4%

Forecast dividend yield 5.7%

Forecast stock return 124.1%

Market return assumption 9.1%

Forecast excess return 115.0%

Company Description

Accenture is a leading provider of IT services and is second only to IBM in terms of market

share. Accenture employs over 500,000 globally. Consulting is roughly 56% of total revenue

and Outsourcing the rest. Accenture was among the first to identify the digital trend and has

acquired scarce skills through multiple tuck-in acquisitions allowing it to gain significant

mindshare and market share. The company has delivered consistent revenue growth and

margin expansion, and has consistently returned capital to shareholders through dividends

and share repurchases.

Valuation Method and Risk Statement

Investing in Accenture will carry risks endemic to investing in all technology stocks, including

price volatility, competition and deflationary pricing trends in certain segments. Competition

is fierce and varied, and risks to pricing and executing larger outsourcing contracts also exist.

The company is also subject to economically-sensitive demand trends in the IT spending

environment, specifically for consulting and system integration services. While traditionally

not seen as a company that makes large acquisitions, Accenture is acquisitive. Each deal

carries price and integration risks. Our price target is based on P/E multiples.

The HOLT methodology does not assign ratings or a target price to a security. It is an analytical

tool that involves use of a set of proprietary quantitative algorithms and warranted value

calculations, collectively called the HOLT valuation model, that are consistently applied to all