Accenture stock returns
The first three and a half months of 2019 have been really good for tech investors. Several stocks have provided double-digit returns and have bounced back after a disappointing 2018.
The Technology Select Sector SPDR Fund (XLK) has risen by 24%, while the VanEck Vectors Semiconductor ETF (SMH) has gained close to 30% this year. But are these tech stocks overvalued at current prices or will they rise higher over the next few months?
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Technology heavyweight Accenture (ACN) has generated returns of 18% in the last 12 months. Since the start of 2019, the stock is up by 27%. Accenture stock is currently trading 0.2% below its 52-week high of $179.64 and 35% above its 52-week low of $132.63. With an RSI (relative strength index) score of 75, Accenture stock is trading well into overbought territory.
Is Accenture overvalued?
Accenture has a forward 2019 PE ratio of 24.4x. For 2020, this ratio is 22.4x. Analysts expect Accenture’s sales to rise 8.9% in 2019 and 7% in 2020. Its EPS are expected to rise 8.5% in 2019 and by 8.9% in 2020.
Its EPS could grow at a compound annual growth rate of 8.9% over the next five years. The stock looks overvalued even if we take into account its dividend yield of 1.7%.
Of the 29 analysts covering Accenture, 16 have given it “buy” recommendations, 12 have given it “hold” recommendations, and one has given it a “sell” recommendation. The average 12-month target price for Accenture is $183.52, which indicates a potential upside of 2.4% from its current level.
The stock of semiconductor (SMH) company Analog Devices (ADI) has generated returns of 21% in the last 12 months.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
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