Fed governors may dissent against Powell amid Trump pressure - WSJ’s Timiraos
On Friday, Piper Sandler analyst firm adjusted its price target for Accenture plc (NYSE:ACN) stock, lowering it to $364 from the previous $396, while maintaining an Overweight rating on the shares. Currently trading at $299.42, the stock has declined 14.1% year-to-date, according to InvestingPro data. The revision followed Accenture’s second-quarter earnings report, which exhibited a modest outperformance in revenue and earnings per share (EPS) against consensus estimates but revealed operating income that slightly missed expectations.
Accenture’s financial results for the second quarter showed both revenue and EPS moderately exceeding the anticipated figures. The company, which maintains an "GOOD" Financial Health score according to InvestingPro, reported EBITDA of $11.47 billion and operates with a moderate debt level. Despite the mixed results, the firm’s guidance for fiscal year 2025 was updated, with revenue and EPS projections tightening to the upside, but operating margins narrowing to the downside.
The analyst from Piper Sandler referenced concerns previously noted about Accenture’s ability to drive the market, given the pressure on its Federal Services segment and the broader macroeconomic uncertainty. These concerns seem to have been validated by the company’s recent performance, which included flat bookings and a slowdown in hiring during the quarter, following three quarters of healthy sequential headcount growth.
Nevertheless, there was a positive aspect in Accenture’s GenAI bookings, which have continued to increase. Even though this area of business remains relatively small, the analyst expressed optimism about its future contribution to revenue. The expectation is that GenAI, which is associated with artificial intelligence readiness and enhancements to the digital core, will become a significant source of income for Accenture over time. As a prominent player in the IT Services industry with a market capitalization of $188.2 billion, Accenture’s transformation presents significant opportunities. For deeper insights into Accenture’s AI initiatives and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, Accenture plc reported approximately $16.7 billion in revenue for fiscal year 2025, marking a year-over-year increase of about 5.4%, or 8.5% on a constant currency basis. Despite the positive revenue growth, Accenture’s gross and operating margins did not meet some analysts’ expectations, leading to adjustments in price targets by several firms. Deutsche Bank (ETR:DBKGn) reduced its price target to $290 while maintaining a Hold rating, citing lower peer group valuations and increased uncertainty. Similarly, Mizuho (NYSE:MFG) Securities cut its price target to $365 but retained an Outperform rating, noting Accenture’s strong execution and leadership in next-generation technology solutions. TD Cowen also lowered its price target to $365, maintaining a Buy rating, and highlighted the challenges in federal procurement related to DOGE. Stifel analysts adjusted their price target to $355, affirming a Buy rating, and noted Accenture’s modest revenue increase of 4.5% year-over-year on an organic constant currency basis. Baird also reduced its price target to $372 while keeping an Outperform rating, emphasizing Accenture’s strong market position and quality of earnings. These developments reflect the company’s resilience amid uncertain market conditions and ongoing macroeconomic challenges.
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