Core Viewpoint - RBC Capital has lowered the price target for Accenture (ACN) to $285 from $372 while maintaining an Outperform rating, citing mixed initial FY26 estimates as a primary reason for stock price pressure [1] Group 1: Financial Performance - Accenture delivered solid Q4 results, but the initial FY26 guidance was mixed compared to prior estimates, contributing to stock price pressure [1] - Bookings have returned to year-over-year growth, with Gen AI bookings exceeding $1.8 billion, indicating a shift from proof of concept to production for more projects [1] Group 2: Valuation Adjustments - RBC is adjusting its earnings model, reducing the forward earnings multiple from 26 times to 20 times, which is a discount to the share's historical average but aligns with similar growth peers [1]

Core Insights - Accenture's fourth-quarter earnings exceeded expectations and highlighted the company's strategic reorganization related to artificial intelligence (AI) [1] - The company initiated a six-month business optimization program, incurring charges of up to $865 million, which includes divestitures of previously acquired companies [1] Group 1: Business Optimization Program - The program focuses on three main strategies: investing in upskilling employees, exiting individuals where reskilling is not feasible, and identifying areas for operational efficiencies [2] - Accenture anticipates savings of over $1 billion from this program, which will be reinvested into the business and its workforce [2] - The company aims to increase overall headcount by 2026 despite the current exits [2] Group 2: Upskilling and AI Adoption - Accenture is committed to upskilling its employees, referred to as "reinventors," to better utilize AI in enterprise settings [3] - There is a recognized need for new skills among the workforce to effectively implement AI, as many companies face challenges with fragmented processes and siloed organizations [3] - Accenture reported 37 new clients with quarterly bookings exceeding $100 million in the fourth quarter, contributing to a total of 129 such bookings for the year, indicating significant demand for its services [3]

Core Viewpoint - Accenture's stock has experienced a significant decline in 2025, with a total return of approximately -33% as of September 25, leading to a historically low valuation multiple, presenting a potential recovery opportunity, particularly in its GenAI business [1][2]. Financial Performance - In Q4, Accenture reported revenues of $17.60 billion, reflecting a 7.3% increase year-over-year, surpassing analyst expectations of $17.34 billion [2][3]. - Adjusted earnings per share (EPS) reached $3.03, an 8.6% growth, exceeding the anticipated $2.98, but the stock fell nearly 3% due to weak fiscal 2026 guidance [3][4]. Guidance and Market Sentiment - For fiscal 2026, Accenture projects revenue growth of 2% to 5% in local currency and adjusted EPS of $13.71 at the midpoint, slightly below analyst expectations of $13.78 [3][4]. - Despite a slight EPS beat, the market reacted negatively to the guidance, reflecting ongoing low sentiment towards the stock [4][11]. Booking Metrics - New bookings totaled $21.3 billion in Q4, a 6% increase in U.S. dollars, indicating stabilization after previous declines in bookings [6][7]. - GenAI bookings grew impressively to $1.8 billion from $1.5 billion in Q3, totaling $5.9 billion for fiscal 2025, outperforming IBM's $5.5 billion in the same period [8]. Operating Margins - Accenture's adjusted operating margin increased by 10 basis points in Q4 and for the full year, which, while modest, is better than expected given the stock's decline [9]. Analyst Outlook - Analysts project a 12-month stock price forecast of $321.33, indicating a potential upside of 38.39%, although recent updates suggest a more conservative average target of $291, implying around 25% upside [10][11]. - The current market consensus suggests Accenture is undervalued, but sentiment remains low due to ongoing restructuring and concerns about the impact of GenAI on future business [11][12]. Restructuring and Challenges - Accenture is undergoing significant restructuring, expecting combined charges of $865 million in Q4 and fiscal Q1 2026, as it shifts its workforce towards GenAI capabilities [12]. - There are concerns that advancements in GenAI could lead clients to rely more on these tools rather than consulting Accenture, posing a long-term risk [13][14].

Accenture (NYSE: ACN) reported fourth-quarter revenue of $17.6 billion, topping expectations, with bookings rising 3% to $21.3 billion.The company issued fiscal 2026 guidance in line with forecasts but announced another restructuring to fund AI-related investments.Guggenheim analyst Jonathan Lee maintained an Accenture Buy rating and lowered the price forecast from $305 to $285.Also Read: Accenture’s AI Push Sparks Growth And Boosts Dividend PayoutsFor Q4, Accenture reported:Revenue of $17.6 billion, above ...

Core Insights - Accenture is restructuring its workforce to adapt to the AI era, involving both layoffs and new hiring initiatives [1][2] - The company aims to upskill its employees while also exiting those who cannot be retrained for necessary AI skills [2] - Despite workforce reductions, Accenture anticipates an overall increase in headcount across all markets in the next fiscal year [2] Financial Performance - Accenture reported $69.7 billion in revenue for fiscal 2025, reflecting a 7% increase from the previous year [8] - The company incurred approximately $615 million in restructuring charges in the latest quarter, primarily for severance, with expectations for this figure to rise to about $865 million [3][4] Talent Strategy - Accenture is focusing on "rapid talent rotation," which involves reducing employees whose skills do not align with new demands while expanding in areas such as data, cloud, and AI consulting [9] - The firm has nearly doubled its AI and data specialists to 77,000 since fiscal 2023 and has trained over 550,000 employees in generative AI fundamentals [4] Industry Context - The strategy employed by Accenture mirrors trends in the broader tech industry, where companies like Microsoft and Meta are also adjusting their workforce by laying off employees while hiring in priority areas [9][10]

Economic Data and Federal Reserve Outlook - Recent economic data has created uncertainty regarding the Federal Reserve's future interest rate cuts, with initial jobless claims dropping by 14,000 to a seasonally adjusted 218,000 for the week ended September 20 [10][11] - The U.S. economy grew faster than previously estimated in the second quarter, driven by strong consumer spending and business investment [10][11] - Investor expectations for another 25 basis points cut in the Fed's October meeting have decreased to 83.4%, down from approximately 92% [10][11] Market Performance - Most S&P 500 sectors ended lower, with energy gaining 0.9% and technology increasing by 0.03%, largely due to Intel's shares rising by 8.9% [5][11] - The Dow Jones Industrial Average fell by 173.96 points (0.38%) to 45,947.32, the S&P 500 lost 33.25 points (0.50%) to 6,604.72, and the Nasdaq Composite decreased by 113.16 points (0.50%) to 22,384.70 [6][11] - CarMax shares dropped by 20.1% following a report of lower second-quarter profit, while Accenture shares fell by 2.7% despite reporting revenue above expectations [6][11] Investor Sentiment and Future Expectations - Investors are keenly awaiting upcoming quarterly results from companies, particularly as market valuations are considered high after recent record highs [7][11] - There is a mixed sentiment among monetary policymakers regarding the direction of interest rates, with some advocating for accelerated policy easing [8][11] - The upcoming monthly U.S. jobs report is anticipated to be significant for market direction [7][11]

LOGIN SUBSCRIBE | FastCo Works advertisement BYÂ Reuters Listen to this ArticleMore info 0:00 / 0:00 Accenture beat fourth-quarter revenue estimates and unveiled a sixmonth, $865 million restructuring to realign its workforce and operations for rising demand in digital and AI services. The restructuring program highlights the broader trend of companies adapting their workforce and operations to meet growing demand for digital and AI services, while using restructuring to cut costs and funnel savings into tr ...

Market Overview - U.S. stocks experienced a decline, with the Nasdaq Composite falling over 1% on Thursday, while the Dow decreased by 0.64% to 45,824.16 and the S&P 500 dropped 1% to 6,571.28 [1] - Energy shares increased by 0.5%, while health care stocks fell by 1.4% on the same day [1] Company Performance - Accenture (NYSE: ACN) reported better-than-expected fourth-quarter 2025 results, with earnings of $3.03 per share, surpassing the analyst consensus estimate of $2.96, and sales of $17.60 billion, slightly exceeding the estimate of $17.36 billion [2] Commodity Market - Oil prices decreased by 0.2% to $64.88, while gold also fell by 0.2% to $3,761.50. Silver prices rose by 1.2% to $44.725, and copper prices dropped by 1% to $4.7660 [5] European Market - European shares were lower, with the eurozone's STOXX 600 falling by 0.52%, Spain's IBEX 35 Index down by 0.18%, London's FTSE 100 down by 0.24%, Germany's DAX 40 dipping by 0.62%, and France's CAC 40 falling by 0.46% [6] Asian Market - Asian markets closed mostly lower, with Japan's Nikkei 225 gaining 0.27%, while Hong Kong's Hang Seng declined by 0.13%, China's Shanghai Composite fell by 0.01%, and India's BSE Sensex decreased by 0.68% [7] Notable Stock Movements - PepGen Inc. (NASDAQ: PEPG) shares surged by 89% to $5.03 following the announcement of a $100 million public offering at $3.20 per share [8] - SciSparc Ltd. (NASDAQ: SPRC) shares increased by 101% to $7.71 after announcing a quantum computing-enabled 3D protein modeling initiative [8] - Plus Therapeutics, Inc. (NASDAQ: PSTV) shares rose by 30% to $0.5264 after securing a national coverage agreement with UnitedHealthcare [8] - Stitch Fix, Inc. (NASDAQ: SFIX) shares dropped by 14% to $4.88 after releasing fourth-quarter results [8] - CarMax, Inc. (NYSE: KMX) shares fell by 23% to $43.86 after reporting second-quarter EPS and sales below estimates [8] - Cemtrex, Inc. (NASDAQ: CETX) shares decreased by 31% to $0.4359 following a 1-for-15 reverse stock split approval [8] Economic Indicators - U.S. wholesale inventories declined by 0.2% month-over-month to $898.8 billion in August, contrary to market expectations of a 0.1% increase [11] - U.S. durable goods orders rose by 2.9% month-over-month to $312.1 billion in August, compared to a revised 2.7% decline in July [11] - The U.S. trade deficit in goods decreased by $17.3 billion month-over-month to $85.5 billion in August, better than market estimates [11] - Initial jobless claims fell by 14,000 to 218,000 in the third week of September, below market expectations [11] - The U.S. economy grew at an annualized rate of 3.8% in the second quarter, an increase from the previous estimate of 3.3% [11]

Core Insights - The introduction of a $100,000 H-1B application fee by President Trump poses significant challenges for consulting firms in talent acquisition, similar to those faced by tech companies [1][7] - Nearly 50% of H-1B applications are linked to professional, scientific, and technical services, highlighting the reliance of consulting firms on foreign skilled workers [2] - The H-1B program has been a crucial source of mid-level consultants with specialized skills, which are hard to find in the domestic market [4] Industry Impact - Consulting firms like Deloitte, EY, and Accenture are among the largest employers of H-1B visa holders, with Deloitte hiring 7,535 workers in the last three years, representing about 1% of its US workforce [5] - Accenture and EY have also significantly relied on H-1B visa holders, with 5,862 and 5,298 hires respectively, accounting for nearly 10% of their US headcounts [5] - The new application fee is expected to increase competition for talent and may lead to accelerated offshoring strategies among consulting firms [7] Strategic Responses - Consulting leaders express concern that the increased costs associated with H-1B visas will add friction to an already competitive talent market [4][6] - Major firms are anticipated to absorb some of the higher visa costs while adjusting their staffing models to maintain continuity [6] - Smaller consulting firms will need to enhance their ability to attract domestic talent, particularly for mid-level positions, to cope with the changes [6]

Core Viewpoint - Accenture's stock declined following the release of its fourth-quarter 2025 results, despite exceeding earnings and sales expectations [1][5]. Financial Performance - Quarterly earnings were reported at $3.03 per share, surpassing the analyst consensus estimate of $2.96 [1]. - Sales reached $17.60 billion, slightly above the analyst consensus estimate of $17.36 billion [1]. - Sales increased by 7% in U.S. dollars and 4.5% in local currency [2]. - Consulting revenues were $8.77 billion, a 6% increase in U.S. dollars and 3% in local currency [2]. - Managed Services revenues were $8.82 billion, an 8% increase in U.S. dollars and 6% in local currency [2]. - Products revenues reached $5.38 billion, up 9% in U.S. dollars and 5% in local currency [3]. - Health & Public Service revenues decreased by 1% in U.S. dollars and 3% in local currency to $3.56 billion [3]. - Financial Services revenue was $3.32 billion, up 15% in U.S. dollars and 12% in local currency [3]. - Resources revenue was $2.39 billion, up 8% in U.S. dollars and 5% in local currency [3]. - Communications, Media & Technology revenue was $2.95 billion, up 7% in U.S. dollars and 5% in local currency [3]. New Bookings and Margins - New bookings for the quarter totaled $21.31 billion, a 6% increase in U.S. dollars and 3% in local currency [4]. - Generative AI new bookings reached $1.8 billion in the quarter [4]. - Operating margin was reported at 11.6%, a decrease of 270 basis points, while adjusted operating margin increased by 10 basis points to 15.1% [4]. Cash Flow and Dividends - The company held $11.5 billion in cash and equivalents as of August 31 and generated $3.81 in free cash flow during the quarter [5]. - Accenture increased its quarterly dividend by 10% to $1.63 per share, payable on November 14, 2025 [6]. Outlook - For fiscal 2026, Accenture projected sales between $71.07 billion and $73.16 billion, exceeding the $69.43 billion consensus estimate [7]. - Expected GAAP EPS for fiscal 2026 is between $13.19 and $13.57, compared to the $12.88 analyst consensus [7]. - The company anticipates fiscal adjusted EPS of $13.52 to $13.90 [7]. - First-quarter sales are projected to be between $18.10 billion and $18.75 billion, against an $18.451 billion analyst estimate [7].