Accenture Stock Drops as Earnings Outlook Misses Expectations

Accenture
stock fell Thursday after the management consultant and tech company reported revenue that missed Wall Street estimates and provided earnings guidance below consensus.

Accenture
(ticker: ACN) posted fiscal-fourth-quarter earnings of $2.71 a share on revenue of $15.99 billion. Analysts surveyed by FactSet were expecting earnings of $2.65 a share on revenue of $16.07 billion. In the fourth quarter last year, the company reported earnings of $2.60 a share on revenue of $15.42 billion.

Accenture
also said new bookings for the quarter were $16.6 billion, a decrease of 10% from the same period last year.

The company expects fiscal 2024 adjusted earnings of between $11.97 to $12.32 a share. That’s below the FactSet consensus of $12.38 a share.

Accenture also posted fiscal 2023 revenue of $64.1 billion. The company expects revenue growth for fiscal 2024 to be between 2% to 5%, which would be less than Wall Street estimates of $67.66 billion.

Evercore ISI analyst David Togut cut his price target on the stock to $333 from $346 but maintained his Outperform rating. Togut wrote in a research note Thursday that “deteriorating discretionary spending softened bookings, increasing headwinds to FY24E revenue growth.”

William Blair analyst Maggie Nolan also maintained her Outperform rating on the stock without a price target.

“Demand for new small deals remains weak, primarily impacting strategy and consulting and systems integration work,” Nolan wrote in a research note. “However, we are encouraged that Accenture continues to capture demand for large transformational deals, as evidenced by 106 clients in fiscal 2023 with quarterly bookings greater than $100 million.”

Chief Executive Julie Sweet said in a news release that she was “extremely proud” of the company’s financial performance. She also added that “our clients’ generative AI bookings of $300 million in the last six months position us at the heart of the beginning of AI-fueled reinvention.”

William Blair’s Nolan wrote that she was “impressed” with gen AI sales.

Shares of Accenture fell 5% Thursday to $298.80 and were on pace for their largest percentage decrease since December 2022, according to Dow Jones Market Data. The stock was the second-worst performer in the
S&P 500
Thursday. Including Thursday’s performance, the stock has risen 12% this year.

Write to Angela Palumbo at [email protected]

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