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Accenture (ACN) Seals Cybersecurity Partnership With AXA XL

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Accenture plc (ACN - Free Report) yesterday announced that it has entered into a security partnership with AXA XL.

The company will provide its cybersecurity capabilities, including iDefense to AXA’s property & casualty (P&C) and specialty risk division. iDefense is a provider of contextual, timely and actionable cyber threat intelligence and helps users defend against new and evolving threats.

AXA XL clients outside the United States will receive Accenture’s post-breach security services that include incident management and IT forensics. Its U.S. clients will receive post-breach services from a group of providers that include Accenture. Services will initially cover manufacturing, retail, financial and healthcare services industries among others and get expanded to P&C industry next year.

We observe that shares of Accenture have gained 36% year to date, outperforming the 31.5% rally of the industry it belongs to and 19.9% rise of the Zacks S&P 500 composite.

Prudent Move in a Growing Cybersecurity Space

The partnership seems to be part of Accenture’s bid to expand its security related offerings on a global scale. That makes sense as the cybersecurity market is expected to expand significantly over the next several years.

Cybersecurity Ventures expect 12% to 15% year-over-year growth of the market through 2021. It estimates worldwide cybercrime damages to cost $6 trillion annually by 2021, up from $3 trillion in 2015. IDC estimates that worldwide spending on security solutions will reach $133.8 billion in 2022, growing at a CAGR of 9.2% over the 2018-2022 period.

The partnership should significantly benefit Accenture’s consulting business. Notably, consulting revenues increased 3% on a reported basis and 7% on a local-currency basis in the third quarter of fiscal 2019. These revenues increased 5% on a reported basis and 9% in local-currency in the first nine months of fiscal 2019. Security-related services are one of the major drivers of this growth.

Zacks Rank & Stocks to Consider

Accenture currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Fiserv , Huron Consulting (HURN - Free Report) and Charles River Associates (CRAI - Free Report) . While Fiserv sports a Zacks Rank #1 (Strong Buy), Huron Consulting and Charles River Associates carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is estimated 13.5%, 13% and 12%, respectively.

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Accenture PLC (ACN) - free report >>

Charles River Associates (CRAI) - free report >>

Huron Consulting Group Inc. (HURN) - free report >>

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