Accenture Could Hit New All-Time High on Strong Q3 Earnings; Target Price $309

Accenture, a global IT Services company that leverages a global workforce to provide consulting and outsourcing services to companies worldwide, is expected to report its fiscal third-quarter earnings of $2.24 per share, which represents year-over-year growth of about 18% from $1.90 per share seen in the same period a year ago.

The U.S-based IT giant would post year-over-year revenue growth of over 16% to $12.79 billion. In the last four consecutive quarters, on average, the company has delivered an earnings surprise of about 4%.

According to Jefferies, revenue and earnings have the potential to grow at a high single-digit pace in the next few years amidst favorable secular trends. The company is on pace to generate $50 billion in revenues in calendar 2021, up 14% year-on-year.

Accenture’s better-than-expected results, which will be announced on June 24, would help the stock hit new all-time highs. Accenture shares rose over 7% so far this year.

Analyst Comments

“We expect strong outperformance & broadly positive tone on demand and its ability to manage tight talent to drive shares higher. Accenture (ACN) is the biggest boat in a rising tide as a robust Services spend recovery has materialized. Valuation remains premium, yet shares have underperformed in recent weeks. We raise estimates to the high end of guides & increase price target to $305,” noted Bryan C. Bergin, equity analyst at Cowen.

Accenture Stock Price Forecast

Eight analysts who offered stock ratings for Accenture in the last three months forecast the average price in 12 months of $309.00 with a high forecast of $329.00 and a low forecast of $288.00.

The average price target represents 9.87% from the last price of $281.25. Of those eight analysts, seven rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $305 with a high of $400 under a bull scenario and $200 under the worst-case scenario. The firm gave an “Overweight” rating on the IT Services company’s stock.

“Industry-wide supply headwinds are hard to ignore, but demand checks remain robust this quarter and project travel looks to be returning. While attrition likely moves higher in the quarter, ACN is among the best-equipped to manage through potential challenges,” noted James E Faucette, equity analyst at Morgan Stanley.

“With demand checks pointing to continued strength, we are moving our 3Q21 revenue estimate ahead of consensus, with our revised 3Q21 revenue / EPS now $12.828bn / $2.26 vs. consensus expectations of $12.783bn / $2.24. Our 4Q21 estimates, which contemplate some resumption of client-related travel, remain unchanged at $12.741bn / $2.08 vs. consensus expectations of $12.483bn / $2.04. This moves our FY21 revenue / EPS estimates to $49.42bn / $8.54 (vs. $49.344 / $8.53 prior), ahead of the Street’s $49.071bn / $8.53.”

Several other analysts have also updated their stock outlook on Friday. Jefferies initiated with a hold rating and a $309 target price. Cowen and company raised the price objective to $305 from $290. BMO lifted the target price to $302 from $292. RBC upped the price target to $301 from $278.

Check out FX Empire’s earnings calendar

Best Growth Stocks May 2021

The hallmark way we go about finding the best stocks…the outliers, is by looking for quiet Big Money trading activity.

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But, the 5 stocks we see as long-term candidates are ACN, ADBE, CROX, RH, & RGEN.

For MAPsignals, we believe the true tell on the near-term trajectory of the stock lies in the trading activity of the stock. The bottom line here is that oftentimes the manner in which a stock trades can oftentimes alert you to the forward fundamental picture more so than by simply looking at a company’s financials alone. We want the odds on our side when looking for the highest-quality stocks.

Up first is Accenture Plc (ACN), which is a leading professional services firm. They have been cruising higher for years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for ACN being:

  • YTD performance (+11.56%)
  • YTD outperformance vs. technology ETF (+.95% vs. XLK)
  • Recent big money signals

Just to show you what our Big Money signal looks like, have a look at all of the top buy signals ACN has made recently. It’s had a strong chart over the past few years, too. Green bars are showing that Accenture was likely being bought by a Big Money player according to MAPsignals. It’s clear there’s a lot of green historically with this stock. That’s exactly what you want to see when looking for a great growth name.

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Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, you need to look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Accenture’s numbers have been strong:

  • 3-year sales growth rate (+6.53%)
  • 3-year earnings growth rate (+13.1%)

Next up is Adobe, Inc. (ADBE), which is a leading software company. The company has been a huge winner over the years as they are extremely profitable.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for ADBE being:

  • YTD performance (+3.12%)
  • YTD vs. software ETF (-2.13% vs. IGV)
  • Recent big money signals

While the stocks has underperformed recently, look below. These are the top buy signals Adobe has made since 2017. Clearly the Big Money has been consistent for years:

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Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a great long-term technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Adobe has solid fundamentals:

  • 3-year sales growth rate = +21%
  • 3-year earnings growth rate = +49.7%

Another growth name to consider is Crocs, Inc. (CROX), which is a leading footwear and apparel company.

When we decide on the strongest candidate for long-term growth, we want to see a history of big money buying the shares. A few technical areas we like for Crocs are:

  • YTD outperformance vs. market (+23.34% vs. SPY)
  • YTD outperformance vs. discretionary ETF (+24.14% vs. XLY)

Below are the big money signals CROX has made since 2017. After the pandemic lows, it’s been moon-bound:

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Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a strong technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. Croc’s revenue growth rate is impressive. I expect earnings to rebound in the coming years:

  • 3-year sales growth rate = +10.67%
  • 3-year earnings growth rate = -585%

Number 4 on the list is RH (RH), which is a leading high-end retailer for the home. The shares have been in bull-mode the past couple of years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for RH being:

  • YTD outperformance vs. market (+41.79% vs. SPY)
  • YTD outperformance vs. discretionary ETF (+42.59% vs. XLY)
  • Recent big money signals

Below are the big money signals that RH has made since 2017:

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Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, RH has been growing nicely:

  • 3-year sales growth rate = +5.31%
  • 3-year earnings growth rate = +2899.12%

Our last growth candidate is Repligen, Corp. (RGEN), which is a leading medical instruments and supplies company. They have been growing rapidly for years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for RGEN being:

  • YTD outperformance vs. market (+2.77% vs. SPY)
  • YTD outperformance vs. healthcare sector (+5.8% vs. XLV)
  • Historical big money signals

Below are the big money signals Repligen has made since 2017. You can see how powerful the performance has been:

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Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Repligen has grown over the past few years:

  • 3-year sales growth rate = +37.39%
  • 3-year earnings growth rate = +41.8%

The Bottom Line

ACN, ADBE, CROX, RH, & RGEN represent top growth stocks for May 2021. Given the strong historical revenue & earnings growth, and multiple big-money buy signals, these stocks could be worth extra attention.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in any of the securities mentioned at the time of publication.

Investment Research Disclaimer