Key Takeaways
- Accenture shares are up 28% in the past month, after fiscal fourth-quarter revenue came in above the top of the company’s own forecast.
- Fiscal 2027 guidance calls for 3% to 6% growth in revenue and adjusted EPS, and acquisitions supply about 2 to 2.5 points of the revenue growth.
- UBS’s $300 target needs a higher multiple than that guidance clearly earns.
- The Hold calls from Baird and Wells Fargo look closer to right, and the December report is the next test.
Accenture (ACN) stock is up 28% in the past month, and the run has carried it past two analysts’ price targets.
Baird downgraded the stock to Neutral on Oct. 21, citing valuation after the rally, even as it raised its target to $252, from $245. Wells Fargo kept its Equal Weight rating on Oct. 26 and raised its target to $252, from $210, saying Accenture may struggle to convince the Street it’s an AI winner until organic revenue accelerates materially. The same day, UBS kept its Buy and raised its target to $300, from $278.
That 28% doesn’t include the report itself. Shares jumped 15.8% on Oct. 1, when fiscal fourth-quarter revenue of $18.7 billion beat the top of management’s own range, and the stock is up about 39% from its Sept. 30 close. Going in, the upside case was that the market could re-rate a business trading below its own history. A good chunk of that has now happened.
Steady guidance, and not much more
For the year ending August 2027, Accenture guided to revenue growth of 3% to 6% in local currency and EPS of $14.39 to $14.81. That’s 3% to 6% above fiscal 2026’s adjusted $13.97. Adjusted EPS grew 8% in fiscal 2026.
Analysts expect $14.66 in fiscal 2027, near the middle of that range, and faster growth in fiscal 2028:
Acquisitions do a lot of the revenue work. Accenture’s investor day presentation on Oct. 14 estimates that acquisitions will add about 2% to 2.5% to fiscal 2027 revenue, up from about 1.5% in fiscal 2026. Take that out, and organic growth lands somewhere between 0.5% and 4%, against about 3.5% in fiscal 2026.
CFO Angie Park said on the fourth-quarter call that the top of the range assumes clients’ discretionary spending holds steady or improves slightly, while “at the bottom, we allow for deterioration.”
TIKR tracks 27 analysts on Accenture. How many say “Buy”?
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Cheap by its own history, for a reason
Accenture still trades below its usual multiple. Its forward P/E is about 18x, against a five-year average of about 24x:
But that average includes a stretch near 38x in late 2021, and management isn’t guiding to the kind of growth that would bring those days back.
$300 needs more than the guidance
The $252 targets work out to about 17x analysts’ fiscal 2027 EPS estimate, roughly where the stock trades on that estimate now. UBS’s $300, about 18% above the Nov. 3 close of $254.56 and well above the Street’s average target of about $230, works out to about 20x.
That’s a richer multiple for slower earnings growth than Accenture just delivered. It could happen if organic growth lands near the top of the range and analysts start raising their fiscal 2028 numbers. But that’s a bet on Accenture beating its own guidance.
Baird and Wells Fargo look closer to right. The rally took Accenture from cheap to roughly fair, which leaves gains from here likely to track earnings growth in the mid-single digits.
Of course, the fiscal first-quarter report in December could change that. Management guided to 2% to 6% revenue growth in local currency for the quarter. A result near the top would make $300 look a lot more reasonable.
So what is Accenture stock actually worth?
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Disclaimer:
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