Accenture Signs Multi-year Deal - Analyst Blog

Technology outsourcing and consulting major Accenture plc (ACN">ACN) recently signed a multi-year technology services contract with global hospitality company Hilton Worldwide. Financial terms of the contract were not divulged.

Hilton Worldwide owns and manages 3600 hotels in 82 countries. With Accenture's technology services, Hilton will be able to develop application programs for managing its properties. Moreover, Accenture will extend its services in support of Hilton's property management program and transactional websites. Accenture's services will be delivered through its Global Delivery Network in collaboration with its partner, Avanade.

Accenture has become one of the founder members of Hilton's Innovation Collaborative, a technology consortium under which it will provide technology and support services to help Hilton deliver efficient and speedy hospitality services across the world. Other members of this consortium are International Business Machines Inc. (IBM">IBM) and Microsoft Corp. (MSFT">MSFT).

Though the financial impact of the deal is unclear as of now, we believe Accenture's association with Hilton Worldwide would improve its chances of obtaining similar deals in the hospitality sector. Moreover, the opportunity to work with other tech giants on a common platform will strengthen Accenture's industry exposure.

We remain encouraged by Accenture's deal winnings from various industry verticals. Recently, National Water Company of Saudi Arabia signed a contract with Accenture for designing and deploying a comprehensive IT solution for its water and waste water services.

We also appreciate the successive acquisitions by Accenture as they enrich the company's product portfolio. Moreover, a rebound in technology spending has led to stronger demand, which helped the company beat the Zacks Consensus Estimate in the last quarter. The increase in new businesses also indicates that spending will likely sustain or grow from these levels.

Currently, Accenture has a short-term Buy recommendation, implying a Zacks #2 Rank.

 
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