Accenture Eyes a Big Opportunity in the Insurance Market
Aug 3rd 2011 4:45PM
Updated Aug 4th 2011 5:53PM
Technology outsourcing and consulting giant Accenture (ACN) has seen its stock shoot up over 50% in the past year and now trades close to an all-time high of $63.66 per share. Accenture's stock performance has been on par with that of IBM (IBM), which recently surpassed Microsoft (MSFT) to become the second largest tech firm by market cap. (See Big Blue Heads for $200 on Double Digit Revenue Growth) Below we take a look at the new additions to Accenture's offerings in the insurance business.
We maintain a Trefis price estimate of $54.40 per share for Accenture's stock, which is roughly 5% below the current market price.
Insurance Market Opportunity
Over the past few weeks, Accenture has made significant new additions to its offerings. On July 14, the firm announced the agreement to acquire Duck Creek Technologies, a privately held company that specializes in software solutions for the property and casualty insurance industry, which will ramp up its offerings in the insurance sector.
Accenture has been serving the insurance sector for years. The firm has won a series of insurance deals in the past few months indicating the popularity of its services. In a recent survey on insurance customer satisfaction, Accenture identified a "significant gap between expectations and reality" and saw a potential business opportunity.
The Duck Creek acquisition is likely to give both Accenture's technology consulting, as well as its technology outsourcing, business divisions a boost. Together, those segments make up about 42% of our price estimate for Accenture.Trefis is an online investment research platform targeted towards individual and professional investors. Trefis also includes a community of users that can create and share their models and analysis on trefis.com.
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