On Friday, BMO Capital Markets adjusted its outlook on Accenture plc (NYSE:ACN), reducing the firm's price target from $385.00 to $375.00. Despite the adjustment, the analyst maintained a Market Perform rating on the company's shares. The revision follows Accenture's reported earnings, which showed a weaker-than-expected quarter, particularly noting a reduced revenue growth forecast for the fiscal year 2024.
The company's updated guidance was a focal point of the analyst's remarks, citing a significant reduction in expected growth. The downward revision was not entirely unexpected, but the magnitude of the change, especially the organic growth forecast, was noted as substantial due to a larger-than-anticipated contribution from mergers and acquisitions.
Accenture's performance is seen as indicative of broader challenges within the information technology services sector. The analyst expressed the belief that the sector remains difficult to navigate, suggesting that Accenture's stock price may not see significant movement in the near term.
This is partly due to expectations of a necessary ramp-up in the second half of FY24 and the August quarter to meet the revised projections.
In summary, the analyst's perspective is that while Accenture faces headwinds, the stock is likely to stay within a certain trading range for now. The new stock price target of $375 reflects a more conservative valuation in light of the recent quarterly results and the updated guidance for the coming fiscal year.
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