Accenture’s Stock Performance: Challenges and Opportunities Ahead
With a market cap of $222.3 billion, Accenture plc (ACN) stands out as a global leader in professional services within the IT consulting and outsourcing industry. This Dublin-based firm offers a wide variety of digital, cloud, and security solutions across finance, healthcare, technology, and energy sectors.
Recent Stock Trends and Market Comparison
Over the past 52 weeks, the consulting company’s shares have not performed as well as the broader market. While ACN has increased by 11.9% during this period, the S&P 500 Index ($SPX) has seen a substantial rise of 36.8%. For 2024, ACN shares are up by 1.3%, compared to the SPX’s impressive return of 25.7% year-to-date.
Further comparison reveals that ACN has lagged behind the Technology Select Sector SPDR Fund’s (XLK) 34.9% returns over the past year and a 23.2% YTD gain.
Impact of Recent Earnings and Company Actions
On September 17, Accenture’s stock experienced a decline of over 4% after the company announced a six-month delay in employee promotions. This decision indicates cost-cutting measures amid slower client spending. Accenture also lowered its annual revenue growth forecast from 5% to 3%, highlighting the economic challenges facing the consulting sector.
However, a recovery occurred on September 26, when the stock rose by 5.6% following Q4 2024 results that surpassed expectations. Adjusted earnings came in at $2.79 per share, with revenues hitting $16.4 billion. Notably, new bookings increased by 21% to $20.1 billion, largely due to major successes in consulting and managed services, indicating strong demand. Revenues from Health & Public Service grew by 10%, and North American revenues climbed 5%, both outpacing analyst forecasts. Additionally, Accenture provided positive Q1 2025 revenue guidance of between $16.9 billion and $17.5 billion, allaying some investor concerns.
Analyst Expectations and Market Sentiment
For the current fiscal year, which ends in August 2025, analysts anticipate ACN’s EPS will grow 6.9% year-over-year, reaching $12.77. The company’s record of beating earnings expectations has been mixed; it met or exceeded consensus estimates in three of the last four quarters while missing them just once.
A review of 27 analysts tracking the stock reveals a “Moderate Buy” consensus rating. This consensus includes 16 “Strong Buy” recommendations, one “Moderate Buy,” and 10 “Holds.”
This outlook is somewhat more optimistic than it was three months ago, with 15 “Strong Buy” ratings then.
On September 28, Susquehanna analyst James Friedman raised Accenture’s price target to $360 while maintaining a “Neutral” rating after the company’s strong Q4 results. The report underscored Accenture’s consulting growth, with bookings up by 21%, driven by 19 large contracts, along with over $1 billion in new generative AI bookings in Q4.
The average price target for Accenture rests at $381.04, suggesting a modest premium of 7.2% above current prices. In contrast, the highest price target reaches $445, indicating a potential upside of 25.2% from present levels.
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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
