Accenture downgraded by TD Cowen on AI concerns
Tweet
Share
E-mailInvesting.com -- TD Cowen downgraded shares of Accenture to Hold from Buy and slashed its price target to $150 from $258, arguing that a near-term recovery has become increasingly difficult as growth expectations weaken and investor sentiment toward the consulting giant deteriorates.
The brokerage said the investment case has become more challenging as revenue forecasts are being cut, while macroeconomic uncertainty and concerns about the impact of artificial intelligence continue to weigh on the company's outlook. Analysts warned that potential catalysts for a positive rerating appear more distant than previously expected.
Accenture's growth trajectory is likely to worsen before improving, according to TD Cowen. The firm said its previous expectation of durable performance ahead of a recovery has not materialized, with earnings estimates moving lower and the company's financial profile failing to rebound as anticipated.
The brokerage expects Accenture's fiscal 2027 revenue growth to come in at 1% to 5% in constant currency terms, compared with Wall Street expectations of 4.4%. It also projects that acquisition-related spending and higher leverage will pressure profitability, leaving its fiscal 2027 revenue and earnings forecasts below consensus estimates.
TD Cowen noted that Accenture remains vulnerable to negative AI-related headlines as rapid advances in AI models continue to reshape technology spending priorities. The analysts also suggested the company may need additional organizational changes to adapt its workforce more quickly to the evolving AI landscape.
Reflecting the weaker outlook, TD Cowen cut its fiscal 2027 revenue, EBITDA and earnings-per-share estimates and said recent bookings contraction, ongoing macro uncertainty and slowing organic growth leave few near-term catalysts for the stock. As a result, the firm lowered its valuation target and moved to the sidelines on the shares.
You May Also Be Interested In
- onsemi downgraded by TD Cowen after Synaptics deal clouds growth story
- S&P affirms U.S. AA+ sovereign rating with stable outlook, flags fiscal pressures
- Argus starts SpaceX at Hold, sees record IPO as a multi-year re-rating challenge
Create E-mail Alert Related Categories
General News, InvestingRelated Entities
Earnings, Definitive AgreementSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
