Was its stock taken out of MarketScreener's US portfolio at the right time? One would be inclined to think so, in light of the results for the third quarter of the current fiscal year, during which Accenture posted stagnant sales coupled with a slight reduction in cash flow, despite a flurry of recent acquisitions.
This is the ninth consecutive quarter of stagnation for the Group. Margins remain constant, however, as 19,000 jobs were cut earlier this year, among other "synergies". This ability to adjust cost structures rapidly to changing market conditions is, of course, the strength of the consulting business model.
Moreover, this situation comes as no surprise to MarketScreener's analysts, who had already partly anticipated it. See Accenture: In line with targets.
After a decade of exceptional growth under the late Pierre Nanterme, entirely self-financed, and an equally exceptional return on investment from its M&A activities, Accenture reached a plateau which logically pointed towards a new strategy focused more on distributing capital to shareholders than on growth.
This is evidenced by the new dividend increase - $2.4 billion distributed over the first nine months of the year, compared with $2.1 billion at the same time last year - and continued intensive share buy-backs - net of stock option issues, $2.6 billion in the first nine months of the year, compared with $2 billion at the same time last year.
Accenture is no exception to the current economic climate, which is affecting the entire consulting sector. After a real boom in recent years, most major accounts have reduced or frozen their budgets. For the time being, AI has not taken up the baton, despite some initial signs.
Nothing to worry about, then, for a global giant that remains a formidable cash machine. If economic conditions do not improve, or even worse if they harden, it could nevertheless become difficult to justify a valuation that remains perfectly in line with its ten-year average.