Thursday, February 2, 2023
HomeMarketAccenture Stock Downgraded. Analyst Sees 'Challenged' Tech Spending Environment.

Accenture Stock Downgraded. Analyst Sees ‘Challenged’ Tech Spending Environment.

Accenture shares have fallen by about 29% this year.

- Advertisement -


Pau Barrena / AFP via Getty Images

Accenture
stock was downgraded to Underweight from Neutral by analysts at Piper Sandler, who pointed to a “challenged tech spend environment” next year.

Accenture
(ticker: ACN) will report fiscal first-quarter earnings on Friday, and Piper analysts led by Arvind Ramnani believe the IT services company likely will report numbers that meet or exceed expectations and maintain its full-year guidance, but will “soften their optimistic/upbeat tone” regarding demand.

In September, Accenture estimated first-quarter sales of $15.2 billion to $15.75 billion. Analysts at the time were looking for revenue of about $16.2 billion. They now expect first-quarter revenue from Accenture of $15.6 billion, according to FactSet.

During the pandemic, “there was a significant acceleration in tech spend as budgets were pulled forward,” Ramnani wrote, but now companies are thinking over those decisions. That, plus macro challenges, are “driving a cautious approach” to next year’s budgets.

“In our view, the larger IT Services are more exposed to budget cuts,” Ramnani added.

Despite the points of concern, Ramnani highlighted Accenture’s “diverse revenue base, deep client relationships and a good business model.”

Accenture shares rose 0.9% Monday to $290.95. The stock has fallen more than 29% this year.

Write to Emily Dattilo at emily.dattilo@dowjones.com

Credit: marketwatch.com

RELATED ARTICLES
- Advertisment -

Most Popular