Accentures, Amdocs: UBS Downgrades

UBS analyst Jason Kupferberg this morning downgraded a pair of IT services stocks,  reducing both Accenture (ACN) and Amdocs (DOX) to Neutral from Buy.

• Accenture: “Given the law of large numbers, increasing competition from IT hardware vendors and pure-play offshore firms, plus [a] lack of game-changing industry catalysts, we have some concerns regarding ACN’s post-recession growth potential,” he writes, adding that the days of 9%-12% constant currency growth “are likely over.” Kupferberg says in a research note that Accenture “continues to be a premiere franchise,” but that a recent 7% cut in partners “could be a signal that the business needs more than just a little tweak.” He keeps his $39 price target; the stock closed Friday at $39.12.


• Amdocs: He writes that further multiple expansion for DOX “will be challenged” until sustainable sequential revenue growth is restored, an event he thinks is still several quarters away. Kupferberg says that with the stock up 66% off the March lows there is now limited headroom in the shares. He keeps his $27 price target; the stock closed Friday at $26.89.

In today’s trading:

• ACN is down 71 cents, or 1.8%, to $38.41.


• DOX is down 48 cents, or 1.8%, to $26.41.