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Accenture plc (ACN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Accenture plc (ACN)

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Intrinsic Value (DCF)

Current$287.77
→
Intrinsic$363.15
+26%
$245.60$363.15$597.12
Market implies 4% growth for 5 years
ACN shows 26% potential upside using 9% growth — reasonable if fundamentals hold.
At $288, the market prices in only 4% growth — below historical 9%, suggesting low expectations.
Range: Bear $246 → Bull $597. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →5%7%9%11%
8%$444$484$527$573
10%$308$335$363$394
12%$236$256$277$299
14%$191$207$223$241

Bull Case

  • Bull case ($597) offers 107% upside at 11% growth, 8% discount
  • 21% margin of safety vs. base case estimate
  • Market-implied growth (4%) ≤ historical CAGR (9%)

Bear Case

  • Bear case ($246) implies 15% downside at 8% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$11.90B
Year 2$13.03B
Year 3$14.26B
Year 4$15.61B
Year 5$17.09B
Terminal$270.85B

📐 Model Inputs

Growth Rate9.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$10.87BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ACN stock undervalued or overvalued?
🟢 UNDERVALUED

ACN trades at $287.77 vs. our DCF-derived intrinsic value of $363.15, implying +32% upside. At a 9.5% WACC and 9.5% projected FCF growth, the market appears to be underpricing the present value of ACN's future cash flows. The bear case ($256.67) still suggests upside, providing margin of safety.

What is ACN's intrinsic value?

Using a 5-year DCF model: Base FCF of $10.87B, projected at 9.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-3.30B net debt and dividing by 0.63B shares: Bear $256.67 | Base $363.15 | Bull $512.37. Current price $287.77 implies +32% to base case.

How is ACN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 9.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($226.37B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.8x.