Robert W. Baird analyst David Koning assigned a Hold rating on Accenture (ACN – Research Report) on March 19 and set a price target of $375.00.
David Koning has given his Hold rating due to a combination of factors surrounding Accenture’s recent financial activities and market positioning. The acquisition of Flo Group is projected to marginally increase Accenture’s annualized revenue by approximately 0.1%. When considering the series of acquisitions that Accenture has made, it is estimated that these could contribute around 2.7% to the fiscal year 2024 revenue, slightly above the company’s guidance for contributions exceeding 2%. Despite this growth from acquisitions, there is a level of caution exercised due to the stock trading at approximately 28 times fiscal year 2025 estimated earnings per share, along with an anticipated near-term flattening in revenue growth.
Furthermore, Koning takes into account the historical impact of acquisitions on Accenture’s revenue growth, which has been in the range of 2-4% annually in recent years. The acquisitions are expected to play a significant role in the second half of the fiscal year, potentially contributing to a 3.7% year-over-year growth. However, there are concerns about a period of slower-than-normal growth following a surge in digital spend from late 2020 to early 2022. Additionally, the increasing cost of acquisitions compared to historical levels suggests potential pressure on capital allocation, which is crucial for the company’s earnings growth trajectory. These factors collectively inform Koning’s decision to maintain a Hold rating on Accenture’s stock.
In another report released on March 18, Piper Sandler also maintained a Hold rating on the stock with a $394.00 price target.
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Based on the recent corporate insider activity of 281 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ACN in relation to earlier this year.
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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.
