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With a market cap of $222.3 billion, Accenture plc (ACN) is a global leader in professional services within the IT consulting and outsourcing sector. Based in Dublin, Ireland, the company provides a wide range of digital, cloud, and security solutions, supporting finance, healthcare, technology, and energy.
The consulting company's shares have underperformed the broader market over the past 52 weeks. ACN has risen 11.9% over this time frame, while the broader S&P 500 Index ($SPX) has increased 36.8%. In 2024, shares of ACN are up 1.3%, compared to SPX’s 25.7% return on a YTD basis.
Looking further, ACN has lagged behind the Technology Select Sector SPDR Fund's (XLK) 34.9% returns over the past 52 weeks and a 23.2% YTD gain.
Accenture's stock fell over 4% on Sept. 17 after announcing a six-month delay in employee promotions, signaling cost-cutting amid slower client spending. This follows Accenture's reduced annual revenue growth forecast from 5% to 3%, reflecting broader economic pressures on the consulting sector.
However, the stock climbed 5.6% on Sept. 26 primarily due to its Q4 2024 results surpassing expectations, with adjusted earnings of $2.79 per share and revenue of $16.4 billion. New bookings rose by 21% to $20.1 billion, driven by significant wins in consulting and managed services, reflecting strong demand. Health & Public Service revenues saw impressive growth of 10%, while North America revenues increased 5%, each outpacing analyst projections. Additionally, Accenture's positive Q1 2025 revenue guidance of $16.9 billion – $17.5 billion reassured investors of continued momentum.
For the current fiscal year, ending in August 2025, analysts expect ACN’s EPS to grow 6.9% year-over-year to $12.77. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 27 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 16 “Strong Buy” ratings, one “Moderate Buy,” and 10 “Holds.”
This configuration is slightly more bullish than three months ago, with 15 “Strong Buy” ratings on the stock.
On Sept. 28, Susquehanna analyst James Friedman raised Accenture’s price target to $360 and maintained a “Neutral" rating following strong Q4 results. The firm highlighted Accenture's growth in consulting, a 21% rise in bookings driven by 19 large deals, and over $1 billion in new generative AI bookings in Q4.
The mean price target of $381.04 represents a premium of only 7.2% to ACN’s current levels. The Street-high price target of $445 implies a potential upside of 25.2% from the current price.
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.
