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On Wednesday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Accenture plc (NYSE:ACN), reducing the price target to $398 from the previous $428, while still holding an Outperform rating on the stock. The revision comes ahead of Accenture’s expected second-quarter fiscal year 2025 results set to be announced on Thursday. With a market capitalization of $202.7 billion, Accenture currently trades at $324.07, showing a 12.86% decline over the past year. According to InvestingPro data, the company maintains a "GOOD" overall financial health score.
Analysts at Mizuho pointed out that although the first quarter was a positive event for Accenture, marked by the company raising its full-year 2025 constant currency (CC) revenue growth forecast, the upcoming second quarter earnings may face new challenges. They remain confident in Accenture’s position as a top-tier operator within the industry but have identified three potential risks that could impact the forthcoming earnings report. InvestingPro analysis reveals that five analysts have recently revised their earnings downward for the upcoming period, while the company maintains moderate debt levels and strong cash flows.
The risks outlined by Mizuho include a further delay in a positive change in operating expense growth among S&P 500 companies, which generally correlates with Accenture’s growth. Additionally, a slight decrease in their proprietary IT Jobs tracker and an increasing number of reports suggesting potential negative effects of DOGE cryptocurrency on government IT budgets were noted as concerns.
In light of these factors, Mizuho has revised its earnings per share (EPS) expectation for the calendar year 2026 to $14.20, a slight decrease from the previously estimated $14.28. The firm also adjusted its valuation multiple for Accenture, applying a 28 times multiple of the anticipated 2026 earnings, a reduction from the previous 30 times multiple, citing slower growth expectations and lower valuations across the IT Services sector. Despite these adjustments, Mizuho reiterated its Buy recommendation for Accenture shares.
In other recent news, Accenture has expanded its AI capabilities by introducing an AI agent builder as part of its AI Refinery platform, leveraging NVIDIA (NASDAQ:NVDA)’s new reasoning models. This development aims to enhance business efficiency across sectors such as telecommunications and financial services. BMO Capital Markets adjusted its outlook on Accenture, reducing the price target to $370 while maintaining a Market Perform rating, due to economic uncertainties and challenges in the federal government services sector. Despite this, BMO anticipates Accenture’s upcoming earnings to potentially surpass consensus revenue estimates.
Meanwhile, Baird upgraded Accenture’s stock rating to Outperform with a price target of $390, citing confidence in the company’s fiscal second quarter and strong demand for Managed Services. Piper Sandler also adjusted its price target for Accenture to $396, maintaining an Overweight rating but expressing caution about the company’s ability to deliver financial upside in the current quarter due to macroeconomic concerns. TD Cowen lowered its price target to $394, retaining a Buy rating and expecting Accenture’s second-quarter results to exceed Wall Street forecasts, potentially leading to modest upward revisions in full-year guidance.
These recent developments reflect varying analyst perspectives on Accenture’s financial health and market position amidst economic uncertainties and policy changes.
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