Accenture Stock Upgraded: Analysts Predict Accelerating Growth Trajectory

Accenture stock upgraded as analyst sees accelerating growth trajectory into FY26 By Investing.com

On Monday, TD Cowen increased its rating on shares of Accenture plc (NYSE:ACN) from Hold to Buy, also raising the price target to $400 from $321. The adjustment reflects the analyst's optimism about the company's prospects as it moves into fiscal year 2025. Accenture is recognized for its recent performance, with bookings surpassing expectations and the company establishing a solid base as it enters FY25. The firm's positive trajectory is attributed to several factors, including the diminishing impact of market headwinds, the successful adoption of Generative AI, and potential demand boosts stemming from Federal Reserve rate cuts, which are likely to support IT budgets and tech stock valuations in calendar year 2025. The upgrade by TD Cowen is not just about Accenture's individual outlook but also represents a broader positive sentiment on the Services sector. Accenture is seen as a prime vehicle for investors seeking exposure to this sector. The company's progress in addressing challenges as it concludes fiscal year 2024 bolsters confidence in a favorable near-term setup. The analyst also points out that Accenture's guidance for the first quarter and the entire FY25 suggests limited downside risk. The current market position is considered to have a protective buffer, and any bearish scenario from this point would likely require a downturn in CY25 budgets or an overvaluation of the company's stock, which the analyst believes is unlikely. In conclusion, the firm's outlook is supported by anticipated improvements across multiple areas of Accenture's business. This includes an expected acceleration of organic growth through FY26 and the belief that investors will likely position themselves favorably in the Services sector in anticipation of a demand recovery by 2025. In other recent news, Accenture plc has demonstrated impressive financial performance with record bookings of $81 billion and revenue of $65 billion in fiscal year 2024. The company's GenAI bookings for the quarter reached $1 billion, marking an 11% increase from the previous quarter and bringing the total GenAI bookings to $3 billion for the fiscal year. Accenture's management expects low- to mid-single-digit growth in both consulting and managed services for fiscal year 2025, with plans to invest approximately $3 billion in acquisitions and return at least $8.3 billion to shareholders. Analysts have varied opinions on the company's performance. BMO Capital increased its price target for Accenture to $390, maintaining a Market Perform rating, while William Blair reiterated an Outperform rating, emphasizing the company's leadership in developing AI capabilities. In contrast, Goldman Sachs (NYSE:GS) maintained a neutral stance on Accenture shares. Accenture's strong market position, as highlighted by TD Cowen's upgrade, is further supported by data from InvestingPro. The company's market capitalization stands at an impressive $219.05 billion, underscoring its significant presence in the IT Services industry. This aligns with the InvestingPro Tip that Accenture is a "prominent player in the IT Services industry." The company's financial health appears robust, with a revenue of $64.9 billion over the last twelve months as of Q4 2024. This solid revenue base supports Accenture's ability to invest in emerging technologies like Generative AI, which TD Cowen identified as a key growth driver. Moreover, Accenture's dividend policy reflects its financial stability. An InvestingPro Tip notes that the company "has maintained dividend payments for 20 consecutive years," with a current dividend yield of 1.69%. This consistent dividend history may appeal to investors looking for both growth and income in the Services sector. For those interested in a deeper analysis, InvestingPro offers 12 additional tips on Accenture, providing a comprehensive view of the company's financial health and market position.

Accenture shares gain as Mizuho lifts price target with Outperform rating By Investing.com

Mizuho Securities adjusted its outlook on Accenture plc (NYSE:ACN), raising the price target to $395 from $365, while maintaining an Outperform rating on the stock. This revision follows Accenture's announcement of robust fourth-quarter fiscal year 2024 results, which included a notable year-over-year growth in new bookings for the second consecutive quarter. Accenture's recent financial disclosure revealed a significant uptick in new bookings, with growth exceeding 20% year-over-year. Additionally, the company provided a solid constant currency (CC) growth guidance for fiscal year 2025, ranging from 3% to 6%. The midpoint of this guidance suggests a potential stabilization in IT Services spending, which may indicate that the sector has moved past its lowest point in terms of expenditure. Mizuho's analysis, which includes a proprietary study of operating expense spending trends among S&P 500 companies, supports the view of a moderating decline in spending compared to earlier in the year. This perspective is detailed in the firm's fiscal year 2025 preview report. The analyst at Mizuho expressed confidence in Accenture's conservative guidance for the upcoming fiscal year, especially in light of the company's momentum in Generation AI (GenAI) services. These services are expected to act as a catalyst for increased customer spending throughout fiscal year 2025. To justify the increased price target, Mizuho has rolled its valuation forward to the calendar year 2026 adjusted earnings per share (EPS) of $14.60. The firm's endorsement of Accenture's performance and outlook underscores a positive sentiment towards the company's financial trajectory and market position. Accenture has delivered impressive financial results, with record bookings of $81 billion and revenue of $65 billion in fiscal year 2024. GenAI bookings for the quarter reached $1 billion, marking an 11% increase from the previous quarter, bringing the total GenAI bookings to $3 billion for the fiscal year. TD Cowen upgraded Accenture's rating from Hold to Buy, reflecting optimism about the company's future prospects. Similarly, BMO Capital increased its price target for Accenture, highlighting the company's consistent bookings performance. William Blair maintained an Outperform rating on Accenture, emphasizing the company's leadership in AI development. However, Baird maintained a Neutral rating, citing cautiousness in IT spending. Accenture's strong performance and positive outlook, as highlighted by Mizuho Securities, are further supported by real-time data and insights from InvestingPro. The company's market capitalization stands at an impressive $219.05 billion, reflecting its significant presence in the IT Services industry. InvestingPro data shows that Accenture's revenue for the last twelve months as of Q4 2024 reached $64.89 billion, with a modest growth of 1.22%. This aligns with the company's solid constant currency growth guidance for fiscal year 2025 mentioned in the article. The operating income margin of 15.46% demonstrates Accenture's ability to maintain profitability amid market challenges. Two relevant InvestingPro Tips shed additional light on Accenture's financial health and market position. Firstly, Accenture "has maintained dividend payments for 20 consecutive years," highlighting its commitment to shareholder returns. This is particularly noteworthy given the company's recent robust financial results. Secondly, Accenture is described as a "prominent player in the IT Services industry," which supports Mizuho's positive outlook on the company's potential to capitalize on emerging trends like Generation AI services. For investors seeking a deeper understanding of Accenture's financial position and growth prospects, InvestingPro offers 10 additional tips, providing a comprehensive analysis to inform investment decisions.