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Investing.com - BMO Capital lowered its price target on Accenture plc (NYSE:ACN) to $325 from $355 on Monday while maintaining a Market Perform rating on the stock. According to InvestingPro data, the stock currently trades at a P/E ratio of 22.7x and analysis suggests the stock is slightly undervalued at current levels.
The price target reduction comes despite Accenture raising its full-year revenue guidance, which BMO Capital noted was better than their expectations and helped by stronger-than-anticipated results in the May quarter.
BMO Capital cited weak bookings as a concern, though acknowledged these results came against a particularly difficult comparison period from the previous year.
The firm highlighted that Accenture is facing a two percentage point revenue growth headwind in the fourth quarter specifically from its federal business, attributed to both contract cancellations and slower new business trends.
BMO Capital concluded that the overall backdrop remains challenging for service providers, including those operating within the federal sector, leading to their decision to maintain a Market Perform rating while reducing the price target.
In other recent news, Accenture reported fiscal third-quarter 2025 results that exceeded expectations, partly due to favorable foreign exchange rates, although Guggenheim expressed concerns about fiscal year 2026 projections. Guggenheim lowered its price target for Accenture to $335, maintaining a Buy rating, while Morgan Stanley (NYSE:MS) also reduced its price target to $340, maintaining an Equalweight rating due to macroeconomic concerns. Stifel maintained its Buy rating with a $355 price target, expecting Accenture to meet its fiscal third-quarter targets despite market challenges. Accenture announced a restructuring to form a new integrated business unit called Reinvention Services, consolidating multiple services under new leadership. The company aims to enhance service delivery by embedding data and AI capabilities. Additionally, Accenture expanded its AI Refinery platform in Europe, focusing on data sovereignty and AI solutions tailored to national contexts. This expansion includes partnerships with organizations like KION AG and Nestlé to utilize AI in manufacturing and product content creation. Accenture estimates that Europe could represent up to 30% of the global sovereign AI market by 2030.
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