Accenture

Accenture’s (ACN) valuation could compress in the medium term amid decelerating cloud growth, longer-than-projected time for revenue contribution from generative artificial intelligence, and higher spending on acquisitions, Morgan Stanley said Wednesday. The brokerage downgraded its rating on the consulting firm’s stock to equal-weight from overweight and reduced its price target to $300 from $382, saying it no longer sees the stock as “relatively attractive.” Morgan Stanley said investor expectations have “largely come down” across the information technology services sector. Accenture shares were down 1.1% ahead of market close on Wednesday. “While overall cloud growth has directionally trended downward, albeit marginally, the hyperscalers are still expected to maintain high double-digit cloud growth in (2024), which is partly driven by AI-related spend on cloud services,” the brokerage wrote. On the contrary, Accenture’s management has highlighted three straight quarters of normalization in cloud growth, according to the note. “With minimal to no improvement […]

Mizuho analyst Dan Dolev reiterates Accenture with a Buy and lowers the price target from $426 to $398.

Accenture (ACN) is grappling with a difficult macro environment, but its unique position to provide digital transformation at scale and its balanced capital redeployment support a higher valuation, RBC Capital Markets said in a report emailed Friday. The brokerage said it reduced its fiscal 2024 and 2025 estimates following the company’s fiscal Q2 results and fiscal 2024 guidance reduction. For fiscal 2024, RBC now expects adjusted earnings of $12.05 per share and revenue of $65.1 billion, down from its previous forecasts of $12.25 per share and $65.5 billion. For fiscal 2025, it now projects adjusted EPS of $12.85 on revenue of $68.2 billion, down from its previous estimates of $13.10 per share and $68.7 billion. The “challenging” demand environment “is constraining budgets to be allocated towards larger transformations, which we note converts to revenue slower than smaller deals,” it said. RBC has outperform rating on the company’s stock and raised

By Tomi Kilgore Accenture expects $600 million in the second quarter for new bookings for generative AI and sees its AI workforce doubling in two years Accenture PLC investors were having their worst day in four years on Thursday, after the management consultant cut its full-year earnings outlook as clients pull further bank on spending and as corporate decision-making continues to get delayed. Meanwhile, the company (ACN) touted its growth in the market for generative artificial intelligence, saying it plans to double its AI workforce over the next two years. New bookings for generative AI totaled more than $600 million during the fiscal second quarter. That brings total bookings to $1.1 billion for the first half of the fiscal year, “to extend our early lead” in the genAI market, Chief Executive Julie Sweet said. “We now have over 53,000 skilled data and AI practitioners, against our goal of doubling our

The following is a summary of the Accenture Plc (ACN) Q2 2024 Earnings Call Transcript: Financial Performance: Accenture Plc reported Q2 earnings with bookings valued at $21.6 billion and revenue of $15.8 billion, which remained similar to the previous year. The quarter’s operating income was reported at $2.2 billion, indicating a margin of 13.7%, a slight drop from the prior year. The EPS (Earnings per Share) for the quarter were $2.77, showing a 3% growth from the preceding year. The company produced a free cash flow of $2 billion and returned $2.1 billion to shareholders via share buybacks and dividends. For the Q3 2024 projections, they anticipate revenues to be between $16.25 billion to $16.85 billion, and full-year 2024 revenues are expected to show a growth of 1-3%. Business Progress: The company experienced a major uptick in client engagement, registering 39 clients with quarterly bookings higher than $100 million. Accenture

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We reduce our target by $27 to $387, 28.5x our FY 2025 (Aug.) EPS view, above peers and ACN’s three-year historical average (~26.5x) on its leadership in GenAI and strong balance sheet, but below our prior multiple (30x) on a softer growth outlook and lower cash balance ($5.1B, down $2.0B Q/Q). We lower our FY 2024 EPS view by $0.20 to $12.14, FY 2025’s by $0.24 to $13.57, and FY 2026’s by $0.05 to $15.15. ACN posted Feb-Q sales of $15.8B (flat Y/Y) and EPS of $2.77 (+16%) while lowering its FY 2024 guide slightly on pressure from smaller (more discretionary) projects. Areas that have struggled industry-wide remained soft, with CMT sales ($2.66B) down 8% Y/Y, Financial Services sales ($2.81B) down 6%, and overall Consulting sales ($8.02B)

Piper Sandler analyst Arvind Ramnani maintains Accenture with a Neutral and lowers the price target from $394 to $379.

Accenture is getting hit by a stormy environment in IT services. SIG Susquehanna analyst James Friedman says in a research note that IT services may be getting hurt as companies prioritize spending on other software. He also sees potential weakness in the sector from pricing pressure due to automation and delays in orders because of generative AI. “There is something in the weather for IT Services, and even Accenture is getting wet,” Friedman says. He says there isn’t enough upside and downgrades the stock to neutral from positive. Shares fall 9.1%, to $345.98.

Accenture (ACN) reported fiscal Q2 adjusted earnings of $2.77 per diluted share, up from $2.69 a year earlier. Analysts polled by Capital IQ expected $2.67. Revenue for the fiscal quarter ended Feb. 29 was $15.8 billion, down from $15.81 billion a year earlier. Analysts surveyed by Capital IQ expected $15.84 billion. For fiscal Q3, the consulting firm expects revenue of $16.25 billion to $16.85 billion. Analysts surveyed by Capital IQ expect $17 billion. For fiscal 2024, the company lowered its revenue growth forecast to 1% to 3% from 2% to 5% previously. The company also lowered its adjusted earnings projection to $11.97 to $12.20, compared to $11.97 to $12.32 previously. Analysts polled by Capital IQ expect $12.24. Shares of the company were down more than 4% in Thursday’s premarket activity.

Guggenheim analyst Jonathan Lee initiates coverage on Accenture (NYSE:ACN) with a Buy rating and announces Price Target of $425.

Morgan Stanley analyst James Faucette maintains Accenture (NYSE:ACN) with a Overweight and raises the price target from $400 to $417.

Piper Sandler analyst Arvind Ramnani maintains Accenture with a Neutral and raises the price target from $335 to $394.