Accenture (NYSE:ACN) Gains Analyst Approval As Outlook & Buyback Raised

Accenture (NYSE: ACN) has received a bullish upgrade from Stifel, with the stock price target being hiked from $340 to $375. This adjustment coincides with Accenture's announcement of Q4 results, which were broadly in line with expectations, mildly to the upside. Analyst David Grossman at Stifel affirmed a Buy rating on Accenture's shares, emphasising that both Q1 and fiscal year 2025 guidance align well with Wall Street predictions.

Accenture's stock performance reflected the positive sentiment from Stifel's report with the price notably increasing 5.56% on the day.

Accenture registered a fourth-quarter revenue of $16.41 billion, marking a 2.6% rise from the year before, with earnings per share (EPS) of $2.66 and an adjusted EPS of $2.79. New bookings for the company skyrocketed by 21% to $20.1 billion, with Gen AI bookings contributing $1.0 billion for the quarter and reaching an aggregate of $3.0 billion for the fiscal year. This uptick is a clear indicator of the burgeoning interest in AI technologies and Accenture's capability to leverage these innovations in its service offerings.

CEO Julie Sweet emphasised Accenture's commitment to accelerating its leadership in Generative AI, which they consider the most groundbreaking technology of the next decade. Under her leadership, the company made significant strides in capturing the Gen AI market which has translated to tangible growth figures.

In addition to the revenue jump, Accenture has projected an ambitious fiscal 2025 EPS of $12.55 to $12.91, exceeding analyst predictions. To further its growth trajectory, the company has also upped its quarterly dividend by an impressive 15%, taking it to $1.48. This move reflects confidence in the company's financial health and a commitment to delivering value to shareholders.

Further bolstering shareholder returns, Accenture has greenlighted an additional $4.0 billion for share repurchases, increasing the total buyback authorisation to $6.7 billion. This decision reveals a strategic approach to capital management aimed at enhancing shareholder value while maintaining the flexibility to invest in growth.

Accenture possesses a substantial market cap of approximately $222.76 billion, backed by a trailing price-to-earnings ratio of 32.57 and a slightly more forward-looking PE of 27.68. The company offers a dividend rate of $5.16, yielding about 1.53%, indicating a commitment to returning value to shareholders.

The updated price target provided by Stifel closely matches with current market dynamics and analyst expectations, underpinning a cautiously optimistic view for Accenture as it navigates through prevailing market conditions in the technology and consulting sectors.