Accenture To Gain From Strong GenAI Project Acceleration Despite Decline In Demand For Smaller Projects: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
RBC Capital Markets analyst Daniel R. Perlin maintained an Outperform rating on Accenture Plc (ACN), raising the price target to $381 from $374, despite a challenging macro environment and a decline in demand for smaller projects. The company's strong acceleration in GenAI projects, with bookings of $600 million in the quarter, is a key growth driver. However, FY24 guidance was revised lower, with revenue and adjusted EPS estimates reduced. Accenture's positioning to aid clients in digital and AI transitions supports a premium valuation, according to Perlin. Investors can also gain exposure through IETC and VNSE ETFs. ACN shares dropped 1.99% to $338.17.
March 22, 2024 | 6:39 pm
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NEUTRAL IMPACT
Accenture's Outperform rating reaffirmed by RBC with a raised price target to $381, despite lowered FY24 guidance due to a challenging macro environment and reduced demand for smaller projects. Strong GenAI project acceleration highlighted as a growth driver.
Despite the short-term challenges and lowered guidance, the strong performance in GenAI projects and the raised price target by RBC Capital Markets suggest a balanced outlook. The premium valuation is supported by Accenture's strategic positioning in digital and AI transitions.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
IShares U.S. Tech Independence Focused ETF (IETC) offers exposure to Accenture, which is positioned for growth in digital and AI transitions despite short-term challenges.
As IETC provides exposure to Accenture, the ETF's performance may be indirectly influenced by Accenture's financial health and growth prospects, particularly in digital and AI sectors. However, the diversified nature of ETFs dilutes the direct impact.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Natixis Vaughan Nelson Select ETF (VNSE) offers investors a way to gain exposure to Accenture's growth, especially in digital and AI transitions.
VNSE, by including Accenture in its holdings, allows investors to partake in Accenture's growth trajectory, especially in the burgeoning fields of digital and AI. The impact on VNSE is moderated by its portfolio diversification.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50