Accenture plc (NYSE:ACN) investors will be delighted, with the company turning in some strong numbers with its latest results. Accenture beat earnings, with revenues hitting US$12b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 12%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 27 analysts covering Accenture are now predicting revenues of US$47.8b in 2021. If met, this would reflect a satisfactory 6.9% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$8.36, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$46.5b and earnings per share (EPS) of US$8.03 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to US$272per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Accenture analyst has a price target of US$306 per share, while the most pessimistic values it at US$200. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Accenture'shistorical trends, as next year's 6.9% revenue growth is roughly in line with 8.2% annual revenue growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 14% next year. So it's pretty clear that Accenture is expected to grow slower than similar companies in the same industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Accenture's earnings potential next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Accenture going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Accenture you should know about.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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