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Why Accenture Stock grew 24% in 2020

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What happened

Accenture (NYSE: ACN) shareholders beat a booming market last year. Their stock gained 24% in 2020 compared to the 16% increase recorded by the S&P 500, according to data provided by S&P Global Market Intelligence.

Stocks followed the broader market closely for most of the year, but ended on a particularly strong note.

Image source: Getty Images.

So what

The business of the consulting giant has seen only a modest impact from the pressures of COVID-19. Global revenue increased in the fiscal third quarter, which ended at the end of May, driven by stable consulting revenues and higher sales from the outsourcing segment. Accenture’s profitability was also maintained at 11% of sales.

Accenture bolstered positive investor sentiment at the end of the year, reporting surprisingly strong sales and earnings to start its new fiscal year. Management also improved its outlook while citing record bookings for its software products.

Now what

CEO Julie Sweet and her team are now seeing sales increase 4% to 6% in fiscal 2021, up from their previous forecast calling for a 2% to 5% increase. If the global economy holds up and the industry avoids a sustained decline in corporate spending due to the pandemic, then Accenture should be able to handle another year of solid growth in its digital, cloud and security services all. by increasing direct cash returns to investors.

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