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Investing.com - Guggenheim lowered its price target on Accenture plc (NYSE:ACN) to $285.00 from $305.00 on Friday, while maintaining a Buy rating on the global consulting firm’s shares. The stock currently trades at $232.56, near its 52-week low of $229.40, with InvestingPro analysis suggesting the stock is undervalued based on its Fair Value model.
The price target reduction follows Accenture’s fourth-quarter fiscal 2025 results, which showed revenue growth of 4.5% year-over-year in constant currency, landing at the higher end of the company’s 1-5% guidance range. The company maintains strong financial health with a 31.91% gross profit margin and has consistently paid dividends for 21 consecutive years, currently offering a 2.55% yield.
Despite meeting revenue expectations and providing a fiscal year 2026 outlook in line with market projections, Guggenheim noted the results "did little to assuage the prevailing investor bear thesis on the potential for ongoing margin challenges."
Accenture announced a restructuring plan during the quarter aimed at funding investments in AI-related skillsets, which Guggenheim identified as potentially concerning since it marks the company’s second restructuring in three years and could signal issues with profitability sustainability.
The firm cited ongoing gross margin challenges and sector-wide multiple compression as key factors behind the price target reduction, though it expressed optimism that Accenture would benefit from clients’ cost optimization initiatives and transformation agendas over the medium term.
In other recent news, Accenture reported its fourth-quarter 2025 earnings, surpassing expectations with earnings per share of $3.03, slightly higher than the forecasted $2.97. The company’s revenue also exceeded projections, reaching $17.6 billion compared to the anticipated $17.35 billion. Accenture’s new bookings reached $21.3 billion, marking a 6% increase year-over-year, with generative AI bookings showing significant growth at $1.8 billion, an 80% increase from the previous year. Evercore ISI has adjusted its price target for Accenture to $280 from $300, maintaining an Outperform rating. Meanwhile, Goldman Sachs reiterated its Buy rating on Accenture with a price target of $330, citing solid quarterly results and strong bookings growth. BMO Capital also lowered its price target for Accenture to $270 from $325, while maintaining a Market Perform rating. Despite these mixed analyst adjustments, the company’s fiscal year 2026 revenue guidance aligned with expectations. These developments reflect the company’s performance and market analysis following its recent earnings report.
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