ARLINGTON, Va. - Accenture (NYSE:ACN) Federal Services (AFS), a subsidiary of global professional services company Accenture (NYSE: ACN), has been awarded a $170 million contract by the Transportation Security Administration (TSA) to provide its Security Operations (SO) with Flexible Agile Scalable Teams (FAST) support services. This Blanket Purchase Agreement is aimed at enhancing the efficiency and business value of TSA's security operations.
The TSA SO is tasked with ensuring the security of the United States' transportation systems, which includes managing checkpoint and baggage screening at around 440 airports nationwide and overseeing more than 280 airports internationally. The TSA also monitors compliance with domestic and international regulatory requirements across all transportation modes.
Under the terms of the agreement, AFS will leverage Agile design, development, testing, and maintenance capabilities to improve TSA SO's existing custom and platform-based applications. Additionally, AFS plans to implement mobile and cloud computing technologies in line with the federal government's Cloud First and Mobile First initiatives.
Accenture Federal Services Managing Director and TSA Lead, Anthony Pinheiro, expressed the company's commitment to supporting the TSA, citing the use of Commercial Off-the-Shelf (COTS) technologies to aid in the TSA's operations. The contract, which extends AFS's long-standing relationship with the TSA, includes a five-year period of performance.
Previously, AFS has been contracted to assist TSA's Vetting and Credentialing Systems and the modernization of the Secure Flight prescreening program. The company's work with the TSA is part of a broader effort by AFS to provide digital and technological support to federal agencies, aiming to enhance national security and improve the efficiency of government operations.
Accenture Federal Services, as a part of Accenture LLP, brings a combination of federal expertise and global innovation to its clients, helping to address critical priorities and challenges faced by the nation. The information for this report is based on a press release statement.
In other recent news, Accenture has been the subject of several notable developments. The company's fiscal third-quarter earnings and revenue are anticipated to align with current expectations, according to BofA Securities. Still, the firm also reduced its price target for Accenture shares to $365, maintaining a Buy rating. This decision comes in light of a downturn in client discretionary spending, which could potentially impact Accenture's revenue growth guidance for fiscal year 2024.
In other developments, Accenture Song has been appointed as the global creative and content agency for Randstad NV. This partnership is expected to enhance Randstad's brand positioning and marketing communications through an AI-powered content studio. Moreover, Accenture has announced the acquisition of Teamexpat, a specialist in embedded software for high-tech industries. This move aims to bolster Accenture's digital engineering services.
Moreover, Baird has adjusted its price target for Accenture shares to $345, maintaining a Neutral rating. This revision comes amid market volatility and possible overly optimistic Street estimates. Lastly, through Accenture Ventures, the company has made a strategic investment in Turbine, an AI-driven biopharma firm. This move is aimed at accelerating drug development processes through Turbine's predictive simulation technology. These are all recent developments shaping Accenture's business trajectory.
InvestingPro Insights
Accenture (NYSE: ACN), a leading global professional services company, has recently secured a significant contract with the Transportation Security Administration, reinforcing its position as a prominent player in the IT Services industry, an attribute highlighted by InvestingPro Tips. This contract is expected to further cement Accenture's status and may influence its market valuation, which currently stands at a robust $181.33 billion USD.
The company's commitment to innovation and technology, as seen through its latest TSA contract, may resonate with its financial stability, underscored by a Price to Earnings (P/E) ratio of 25.85. This figure reflects investor sentiment on Accenture's earnings potential, despite it trading at a high P/E ratio relative to near-term earnings growth, another point raised by InvestingPro Tips. The company's low price volatility is a testament to its steady performance in the market.
From a dividend perspective, Accenture has a history of rewarding its shareholders, having raised its dividend for 4 consecutive years and maintained dividend payments for 20 consecutive years, which could be appealing to income-focused investors. Moreover, with the company trading near its 52-week low, this may present a potential entry point for investors considering the long-term value and high return Accenture has offered over the last decade.
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