Accenture's Q4 Earnings Impact: Analyst Lowers Price Target on Light Bookings

TD Cowen's Bryan Bergin lowered their price target on Accenture (NYSE: ACN) by 3.8% from $312 to $300 on 2023/09/29. The analyst maintained their Hold rating on the stock.

In a note to investors, Bergin summarized the impact of Accenture's fourth quarter and fiscal year 2023 earnings, which were reported on September 23. Bergin stated, "Light Q4 bookings and mixed demand signals are weighing on near-term growth, setting up a steeper FY 2024 trajectory." The analyst also highlighted that TD Cowen expects positive demand indicators to remain limited throughout the year due to customer budget uncertainties, which could offset any potential near-term upside drivers.

Accenture's fourth quarter 2023 results showed earnings per share (EPS) of $2.71, surpassing the Zacks Consensus Estimate of $2.62 and representing a 4.2% increase compared to the same quarter in 2022. Revenue for the quarter came in at $15.99 billion, in line with the Zacks Consensus Estimate and reflecting a 3.7% increase year-over-year. The company reported operating cash flow of $3.41 billion.

For the fiscal year 2023, Accenture reported EPS of $11.67, a 9% increase compared to the previous year. Revenue for the fiscal year totaled $64.11 billion, surpassing the previous year's figure by 4.1%. The company generated operating cash flow of $9.52 billion.

Looking ahead, Accenture's management provided guidance for the first quarter of 2024, with a revenue range of $15.85 billion to $16.45 billion. For the full fiscal year 2024, the company expects EPS in the range of $11.97 to $12.32, revenue growth of 2% to 5%, and operating cash flow between $9.3 billion and $9.9 billion.

Accenture's CEO, Julie Sweet, expressed her satisfaction with the company's financial performance in FY 2023, stating, "I am extremely proud that we have achieved another strong year of financial performance in FY 2023. Our ability to remain laser-focused on meeting the needs of our clients is reflected in new bookings of $72 billion in FY 2023; 106 clients with quarterly bookings of more than $100 million; and reaching a record 300 Diamond clients, our largest relationships."

Other analysts also updated their ratings on Accenture on September 29. David Koning from Baird lowered their price target by 3% to $332, maintaining a Hold rating on the stock. Arvind Ramnani from Piper Sandler lowered their price target by 3.8% to $312, also maintaining a Hold rating. Keith Bachman from BMO Capital lowered their price target by 2.8% to $360 and maintained a Hold rating.

Currently, 57.1% of top-rated analysts rate Accenture as a Strong Buy or Buy, while 42.9% consider it a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Accenture's upcoming year will deliver earnings per share (EPS) of $13.03. If the analysts' predictions are accurate, ACN's next yearly EPS will increase by 14.7% compared to the previous year.

Since Accenture's latest quarterly report on September 28, the stock price has risen by 2.1%. Year-over-year, the stock has experienced an 18.9% increase. During the same period, Accenture has outperformed the S&P 500, which has seen a growth of 17.8%.

Bryan Bergin, the TD Cowen analyst who adjusted the price target and rating for Accenture, is ranked in the top 18% out of 4,343 Wall Street analysts, according to WallStreetZen. With an average return of 3.8% and a 50% win rate, Bergin specializes in the Communication Services and Consumer Cyclical sectors, among others.

Accenture, founded in 1989 and based in Dublin, Ireland, is a management consulting, technology, and outsourcing services company. It caters to various industries, including communications, electronics, technology, media, entertainment, banking, capital markets, insurance, healthcare, chemicals, energy, forest products, metals and mining, and utilities.

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