Cowen cuts Accenture price target to $365, maintains buy rating

On Thursday, TD Cowen analysts, led by Bryan Bergin, reduced the price target for Accenture plc (NYSE:ACN) shares to $365 from $394, while still recommending the stock as a Buy. This adjustment comes as InvestingPro data shows 8 analysts have revised their earnings downward for the upcoming period. Currently trading at $300.91, Bergin acknowledged the challenges Accenture is facing, particularly due to pressures in federal procurement as it relates to the digital currency DOGE. He noted that while the impact of these pressures is not fully quantifiable at this time, they represent a headwind for the company.

Despite the adjustments in federal procurement related to DOGE, Accenture’s overall business remains stable. With a market capitalization of $203 billion and revenue growth of 2.75%, the company’s market strategy mix is seen as a positive factor that could provide some degree of protection against current challenges. As InvestingPro confirms, Accenture is a prominent player in the IT Services industry, maintaining strong financial health with a ’GOOD’ overall score, which may help the company navigate through short-term uncertainties.

Bergin also pointed out that while the core aspects of Accenture’s business have not changed, there is a need for caution in the near term due to the prevailing uncertainty. As a result, the firm has slightly reduced its financial estimates for Accenture for fiscal years 2026 and 2027. This adjustment is a precautionary measure until more clarity is available regarding the situation.

The revised price target of $365 reflects the potential risks that Accenture may face in the short term. However, the continuation of a Buy rating indicates that TD Cowen analysts believe in the long-term prospects of the company, despite the current headwinds.

Accenture’s stock performance will continue to be monitored by investors as the company responds to the dynamic federal procurement landscape and any further developments in the digital currency space that may affect its operations.

In other recent news, Accenture reported its second-quarter financial results for fiscal year 2025, surpassing analyst expectations with an earnings per share (EPS) of $2.82 compared to the forecasted $2.81. The company achieved a revenue of $16.7 billion, slightly exceeding the anticipated $16.63 billion. Despite this positive performance, Accenture’s stock experienced a decline in premarket trading, reflecting broader market concerns. Analysts at Stifel adjusted their outlook for Accenture by reducing the stock price target to $355 from $380, but maintained a Buy rating. Accenture also raised the lower end of its revenue guidance for fiscal year 2025, projecting a 2-4% growth on an organic constant currency basis. However, the company faces challenges due to the U.S. government’s spending cuts, which have impacted its federal services unit, accounting for about 8% of its total revenue. Additionally, the company reported a 3% decline in new bookings, totaling $20.9 billion, indicating a cautious market environment. Despite these challenges, Accenture continues to focus on strategic areas such as artificial intelligence and digital transformation, with $1.4 billion in new GenAI bookings.

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