TD Cowen analyst Bryan Bergin reiterated a Hold rating on Accenture (ACN – Research Report) today and set a price target of $363.00.
Bryan Bergin has given his Hold rating due to a combination of factors including Accenture’s recent share performance, which has been notably positive. However, his cautious stance is also influenced by the company’s current high valuation and the somewhat subdued outlook for organic growth in the services sector for fiscal year 2024. While there are concerns about the potential for growth within the company’s organic projections, there are elements that mitigate the risk of significant downside. These include Accenture’s robust mergers and acquisitions strategy, which supports the overall growth forecast, and the current consensus estimates which appear to have already accounted for possible risks. Additionally, there is a sense of optimism around the company’s endeavors in generative artificial intelligence, which may cushion the impact of slower organic growth.
Bergin also takes into account the broader services market, which hasn’t shown significant changes in demand, especially in areas that could quickly affect organic growth for fiscal year 2024. Despite a lack of indicators for a swift recovery in certain segments, demand for cost optimization and major deal activity plays to Accenture’s strengths, given its diverse offerings and scale. Bergin anticipates that Accenture will continue to execute its acquisition strategy, potentially leading to an upward revision of the lower end of its growth projections. The company’s progress in generative AI is seen as a key factor that could alleviate concerns over slower client demand, keeping the potential for future growth alive. Bergin’s projection includes a raised price target, factoring in a broader market multiple expansion, though tempered slightly by foreign exchange considerations, and he maintains a Market Perform rating.
In another report released on March 5, Robert W. Baird also maintained a Hold rating on the stock with a $364.00 price target.
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Accenture (ACN) Company Description:
Accenture Plc is a multinational professional services company, which provides management consulting, technology, and outsourcing services. The company generates revenues from five industry groups, including Communications, Media, and Technology; Financial Services; Health and Public Service; Products; and Resources. The company was founded in 1989 and is based in Dublin, Ireland.
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