Accenture stock price target lowered to $295 by TD Cowen on mixed outlook

Investing.com - TD Cowen has reduced its price target on Accenture plc (NYSE:ACN) to $295 from $313 while maintaining a Buy rating on the stock. The company’s shares, currently trading near their 52-week low of $229.40, have declined nearly 33% year-to-date. According to InvestingPro analysis, Accenture appears undervalued based on its Fair Value metrics.

The adjustment follows Accenture’s fourth-quarter performance, which TD Cowen described as "better than more dire expectations" but still facing "an uphill battle" in terms of stock setup. The firm noted that positive aspects such as reduced Federal Reserve headwinds and fiscal year 2026 outlook were counterbalanced by cautionary factors including consulting business-to-business challenges, gross margin concerns, and restructuring. InvestingPro data shows the company maintains strong fundamentals with a GOOD Financial Health Score, supported by robust revenue growth of 7.36% and a P/E ratio of 19.05x.

TD Cowen characterized the situation as a "clearing event" on estimates while "the structural debate rages on" regarding Accenture’s business model. The firm specifically mentioned generative AI as a continuing factor in the company’s outlook, though it acknowledged this wasn’t a quarter where significant AI-related clarity was expected.

The research note indicated that Accenture has described generative AI as a "net business tailwind" but hasn’t quantified how AI-led versus traditional delivery has impacted its financial profile. TD Cowen suggested that sentiment toward Accenture is "overly negative," though investors will need patience as parts of the business face pressure.

TD Cowen’s analysis concluded that Accenture shares "may grind higher" following the reset of estimates, assuming the macroeconomic backdrop improves through 2026 as interest rate cuts and trade clarity materialize. The company has maintained dividend payments for 21 consecutive years with a current yield of 2.55%. For deeper insights into Accenture’s valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Accenture has reported its fourth-quarter results, revealing revenue of $17.6 billion and earnings per share of $3.03, slightly surpassing analyst expectations of $17.4 billion and $2.98, respectively. The company also announced new bookings totaling $21.3 billion, marking a 6% increase year-over-year, with significant growth in generative AI bookings, which rose by 80% to $1.8 billion. UBS maintained its Buy rating for Accenture, setting a price target of $315, citing strong fourth-quarter performance and promising fiscal 2026 guidance. Meanwhile, Guggenheim lowered its price target to $285, expressing concerns over margins, despite maintaining a Buy rating. Evercore ISI also reduced its price target to $280, attributing the change to modest growth, while maintaining an Outperform rating. Goldman Sachs reiterated a Buy rating with a $330 price target, highlighting solid quarterly results and in-line fiscal 2026 guidance. BMO Capital adjusted its price target to $270, maintaining a Market Perform rating, noting solid bookings growth and alignment with their revenue expectations for fiscal year 2026. These developments reflect a mixed but generally positive analyst outlook on Accenture’s recent performance and future prospects.

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