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ShareAccenture Stock Target Soars As CEO Sees IT Recovery
Posted by Bob Evans on Dec 2, 2009 03:22 PM
A Credit Suisse analyst has boosted his target price for Accenture shares from $42 to $55 on the expectation that enterprise IT spending is beginning to loosen up and that Accenture will be a prime beneficiary of CIOs' more-expansive spending habits and their increasing acceptance of outsourcing.
From a TechTraderDaily.com article:
Keane says that while Accenture was surprised by the steep decline in consulting spending in early 2009, the pick up in demand seems to be tracking faster than in previous cycles. "Heading into 2010, we believe ACN is an excellent play on the recovery of enterprise spend and the accelerating trend towards outsourcing services," he writes. Keane adds that pricing appears to have stabilized, close rates have increased and deferrals and cancellations have slowed.
In a Wall Street Journal article last week, Accenture CEO William Green said this about the return of technology spending:
It's starting to come back. It's an interesting time of the year because with tech spending, sometimes there's a budget flush at the end of the year. So you can't be confused by [the fourth quarter].In an upturn people are looking at customer acquisition, improving customer service models, [and other] investments. When you have a downturn, people look at how to improve the cost performance of everything.
A lot of the work we're doing right now is around rationalizing and streamlining. People have made major investments in technology and software and systems, and many times companies are disappointed with the results they got.
And in an incredibly strong show of evidence for his believe that tech spending is coming back, Green also told the Journal that Accenture plans to hire 37,000 new employees in 2010: "We'll see how 2010 unfolds. Our plan right now is [to hire] about 37,000 people. We're also positioning to aggressively hire at the very senior level as well in specific skill categories. "
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