The Zacks Analyst Blog Highlights: Royal Dutch Shell Plc, PetroChina Company Limited, Accenture plc, Microsoft and IBM

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Aug 24, 2011, 09:30 ET

CHICAGO, Aug. 24, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Royal Dutch Shell Plc (NYSE: RDS.A), PetroChina Company Limited (NYSE: PTR), Accenture plc (NYSE: ACN), Microsoft Corp. (Nasdaq: MSFT) and IBM Inc. (NYSE: IBM).

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Here are highlights from Tuesday's Analyst Blog:

Shell, PetroChina Bid for Bow Energy

Arrow Energy Ltd. – a joint venture between global energy firm Royal Dutch Shell Plc (NYSE: RDS.A) and state-controlled Chinese energy giant PetroChina Company Limited (NYSE: PTR) – announced that it has made a preliminary, non-binding offer of A$520 million or $543 million to acquire Australian gas explorer Bow Energy.

Queensland-based Arrow's purchase price offer of A$1.48 per share in cash represents 67% premium to Bow's Friday's closing price of 88.5 cents. Arrow targets to utilize Bow Energy resources for the expansion of its proposed liquefied natural gas (LNG) project in Australia.

Arrow Energy, which was acquired by Shell and PetroChina for A$3.4 billion about a year ago, plans to set up an LNG plant on Curtis Island with an initial capacity of 8 million tons per annum. The facility will be designed with two trains, each producing four million tons of LNG per annum for export, with expandable capacity.

If successful, the acquisition will help Arrow Energy to receive additional gas reserves thereby doubling the venture's initial capacity to 16 mtpa in the second phase. The project is expected to be operational in 2017.

Last week, Arrow Energy went ahead with the design phase for the first stage of its LNG project, awarding a front-end engineering and design contract to Japan's Chiyoda Corporation.

We appreciate Shell's and PetroChina's efforts to develop the potentially lucrative natural gas business, which is expected to witness strong growth in the coming years.

The Hague-based Shell has operations worldwide and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources and other energy related businesses.

Headquartered in Beijing, PetroChina is engaged in exploration, development, production and sale of crude oil and natural gas; refining, transportation, storage and marketing of petroleum products; manufacture and sale of chemical products as well as transmission of natural gas, crude oil and refined products.

We maintain a long-term Neutral rating on both Shell and PetroChina. Both companies currently retain a Zacks #3 Rank, which translates into short-term Hold rating.

Accenture to Acquire Zenta

Technology outsourcing and consulting major Accenture plc (NYSE: ACN) recently entered into an agreement to acquire Zenta, a provider of residential and commercial mortgage processing services. However, the company did not disclose the financial details of the deal.

Accenture believes that the acquisition of Zenta will expand its capabilities, helping lenders, services and real estate investment trusts to upgrade and streamline their operations, improve customer experience and boost profitability in new markets.

Following the news of the acquisition, Accenture shares surged $1.43 (3.0%) to $48.87.

Currently, mortgage lenders are incurring huge costs related to risk management, which has forced financial institutions to bring about changes in their loan origination and servicing/loss mitigation operations. The acquisition is expected to enhance the company's competence in the field of commercial mortgage processing.

Accenture has been continuously expanding through acquisitions over the prior year. Earlier this year, the company signed an agreement to acquire property and casualty (P&C) insurance solutions provider, Duck Creek Technologies, for an undisclosed amount. The acquisition is expected to be closed by mid August.

Founded in 2000, Missouri-based Duck Creek has evolved as a prominent P&C policy administration solutions provider in North America and the U.K. The company's services include processing of all commercial, personal and specialty lines of businesses.

Post acquisition, Accenture will combine Duck Creek's intellectual property with its P&C software product portfolio. Both the companies' technologies are based on Microsoft Corp.'s (Nasdaq: MSFT) .NET (dot net) platform, which should enable fast and easy integration. The combined platform will help Accenture offer more comprehensive software solutions and facilitate hassle-free processing of P&C claims.

Accenture reported encouraging third quarter results with both the top and bottom line outpacing the Zacks Consensus Estimates. Based on improving business momentum and market share gains, Accenture raised its revenue and earnings guidance for fiscal 2011. Moreover, we are optimistic about the steady flow of new businesses and believe that the trend will continue going forward.

Apart from this, we remain upbeat about Accenture's deal wins from various industry verticals. We also believe Accenture's recent acquisitions will enrich its product portfolio. However, increasing competition from IBM Inc. (NYSE: IBM) may temper growth prospects to some extent.

Currently, Accenture has a Zacks #3 Rank, which implies a short-term Hold rating.

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