Accenture stock price target cut to $394 by TD Cowen

On Thursday, TD Cowen analyst Bryan Bergin adjusted the price target for Accenture plc (NYSE:ACN) shares, reducing it to $394 from the previous $401, while maintaining a Buy rating on the company. With a current market capitalization of nearly $200 billion and a P/E ratio of 26.5x, InvestingPro data suggests the stock is currently trading below its Fair Value. Bergin shared his expectations for Accenture’s second-quarter results, which are set to be released on March 20, 2025, predicting they will surpass Wall Street’s forecasts. This, he believes, will allow for modest upward revisions to the company’s full-year 2025 constant currency revenue and earnings per share growth guidance, with midpoints increasing by approximately 50 basis points.

Bergin acknowledged the current uncertainty due to policy volatility under the Trump administration but expects Accenture to convey a relatively stable demand outlook. Despite concerns leading into the second quarter, Bergin does not anticipate a significant impact on the company’s performance at this time. According to InvestingPro analysis, Accenture maintains a strong financial health score of 2.7 out of 5, with particularly robust profitability metrics. The broader analyst consensus suggests a potential 23% upside from current levels. He noted that while there’s a chance that the high end of consensus estimates for fiscal year 2025 might require adjustment if the company does not modify its top-end growth guidance and foreign exchange headwinds intensify, a consistent message and strong bookings could still provide some relief for the company’s stock.

The analyst also adjusted revenue and earnings per share estimates to factor in incremental foreign exchange fluctuations and scaled back fiscal year 2026 growth estimates by about 50 basis points to account for additional risks in both commercial and government sectors. Consequently, the forecast for fiscal years 2025 and 2026 saw minor revisions, with both revenue and earnings per share estimates decreasing by 0.1%.

In his commentary, Bergin stated, "While we don’t see an outright cut, the risk here is that elevated FY25 consensus estimates at the top end of ACN’s growth guide will need to be moderated as ACN may not adjust the top end of growth guide and FX headwinds worsen to weigh on optics." He also mentioned that Accenture’s shares are currently trading at a 10% discount to their five-year average forward price-to-earnings multiple, which could indicate a buying opportunity for investors. The new price target of $394 is based on 28 times the projected earnings for calendar year 2026. InvestingPro has identified several key insights, including that the stock’s RSI suggests oversold territory, though five analysts have recently revised their earnings expectations downward. Subscribers can access 12 additional ProTips and a comprehensive Pro Research Report, offering deeper analysis of Accenture’s valuation and growth prospects.

In other recent news, Accenture has reported several strategic developments. The company announced its acquisition of Soben, a construction consultancy service provider, to bolster its project management capabilities, particularly in data center development. This acquisition is expected to enhance Accenture’s service offerings in project, cost, and commercial management across various industries. Additionally, Accenture has made a strategic investment in OPAQUE, a company specializing in confidential AI technology, to improve the security and privacy of AI operations in cloud computing environments. This investment aligns with Accenture’s strategy to empower businesses with secure AI-driven insights.

Furthermore, Accenture has partnered with CrowdStrike (NASDAQ:CRWD) to enhance cybersecurity operations by combining Accenture’s security services with CrowdStrike’s Falcon® platform. This collaboration aims to streamline security workflows and improve threat detection and response capabilities. In another significant move, Accenture has invested in Aaru, a company known for its AI-powered predictive technology, to innovate in customer strategy and product development. This partnership will integrate Aaru’s Lumen model into Accenture’s AI products and services.

Analyst firm Goldman Sachs has maintained its Buy rating and $430 price target for Accenture, suggesting that the company could potentially strengthen its market position if it delivers strong revenue results in its upcoming earnings report. These developments reflect Accenture’s ongoing efforts to expand its capabilities in AI, cybersecurity, and project management, aiming to provide tangible value for its clients across various sectors.

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