Accenture Plc.
(
ACN
) has been selected by Guardia Civil, the largest police department
in Spain. The force is in the process of integrating 12 additional
information sources into its existing system of investigation and
operation and this is where Accenture's services are expected to
play a key role.
The company has grown its defense and public safety
business, as agencies in this segment face regular challenges from
other technologically advanced counterparts. Moreover, declining
budgets and increase in security requirements are also increasing
the needs. So, Accenture plays an exact role in bridging this
gap.
Accenture will play a key role in the integration process and
would be instrumental in providing technology services and will
also help in managing the transfer and integration of data through
a robust and secure IT architecture.
Accenture's comprehensive service offerings have made it one of
the key IT service providers. A large product and service base has
also placed the company well in. Accenture has regularly won deals
from all industrial sectors as well as the federal vertical.
Industry experts are, however, concerned about the growing
foreign exchange headwinds that can have a negative impact on its
revenue as most of the company's revenue comes from the
international market. Although Accenture's track record is good,
the ongoing difficult economic conditions in Europe could affect
Accenture's revenues going into fiscal 2013.
The macroeconomic uncertainties and lower-than-expected growth
can have a dampening effect on the demand for the company's
products. Moreover, the company is seeing a mixed trend in the
Americas, although the situation in U.S. is better than Europe.
Moreover,
Adobe Systems
(ADBE) recently came out with a cautious outlook, based on weaker
demand in Europe, as the company has significant demand in the
region. Not only in Europe, businesses are affected by slower
growth in other parts of the world like Japan, China, India and
others. We also remain concerned about the financial services
sector in Europe.
Accenture will continue to invest in priority industries (such
as Communications) and emerging markets as well as to boost its
brand value. Management expects this focus to generate more
business in fiscal 2012.
But competitive pressure from
IBM
Corp.
(
IBM
) and Deloitte Consulting LLP, a strained spending environment and
European exposure compel our short-term bearish view on the
stock.
Currently, Accenture has a Zacks #3 Rank, implying a short-term
Hold rating.
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