Analyst Note| Julie Bhusal Sharma |
Accenture’s second-quarter results showcased impressive strength from broad-based growth that brought a return to pre-COVID levels, even with unique challenges--including lack of travel revenue to boost top-line growth. As a result, Accenture’s second-quarter results surpassed our revenue and EPS expectations and came with updated, pleasantly improved guidance for the remainder of the fiscal year. While we continue to view wide-moat Accenture as a high-quality stock with the capabilities to meet the needs of its growing market, we’re maintaining our fair value estimate of $200 per share, as we believe that pulled-forward growth from raised guidance will moderate long-term growth slightly given the one-time nature of some of Accenture’s offerings, especially work around workload cloud migrations. Upon results, Accenture’s shares remain roughly unfazed, as we think great results and outlook were offset by the Treasury yield rising. Nonetheless, we still view Accenture shares as overvalued.