Accenture plc (ACN) shares continued their steep descent on Monday, falling 7.1% to $118.88, as Wall Street analysts rushed to lower expectations following the company's disappointing fiscal third-quarter results. The stock had already dropped 18% on Thursday after the earnings release and ended last week down nearly 25%, marking its worst weekly performance on record.
Analysts Turn Bearish on Growth Outlook
TD Cowen analyst Bryan Bergin downgraded Accenture to Hold from Buy and slashed his price target to $150 from $258. "Our call for durability before potential recovery was wrong," Bergin wrote, adding that "sustaining the positive rating doesn't have a clear rationale as numbers go the wrong way." He noted that investor concerns initially centered on AI disruption, but the latest earnings report triggered another round of estimate reductions and heightened worries about the company's growth trajectory.
A key source of concern was Accenture's bookings performance. Bergin highlighted a 3% decline in bookings from the prior quarter, calling the contraction "not on our bingo card." While he believed consensus expectations had been too high, he had still anticipated "modest growth." Management attributed part of the weakness to several deals being pushed into fiscal 2027, but Bergin argued that even after accounting for an assumed $1 billion shortfall from delayed deals, managed services bookings would still have declined. That outcome, he said, "would have challenged investor growth views" regardless.
Bergin now sees limited near-term catalysts for the stock, expecting shares to remain vulnerable to headlines and continued selling pressure as AI adoption evolves. The downgrade makes him one of the more cautious analysts covering Accenture. According to FactSet data, 17 of 30 firms rate the stock Buy or Overweight, 13 recommend Hold, and none carry a Sell rating.
AI Investments Continue Amid Headwinds
Jefferies analyst Surinder Thind also lowered his price target to $130 from $185 while reiterating a Hold rating. Thind cited lower revenue and earnings estimates for calendar 2027 and noted that geopolitical tensions in the Middle East, which Accenture CEO Julie Sweet identified as a factor affecting results, "is putting further pressure on weak discretionary spend." He argued that advances in AI are reshaping Accenture's addressable market, with the total addressable market for its more traditional services "shrinking faster than anticipated, especially among its larger, more sophisticated clients."
Despite near-term challenges, Accenture continues to invest heavily in artificial intelligence. The company has partnerships with AI leaders including OpenAI and Anthropic and has been developing agentic AI offerings for clients. RBC Capital maintained an Outperform rating while lowering its price target to $175 from $253, citing macroeconomic pressures including a $100 million headwind from the Middle East conflict, longer decision cycles in Europe, and delayed managed services deals.
RBC noted that Accenture initiated 100 new advanced AI projects during the third fiscal quarter and expects growth to accelerate as federal headwinds ease, delayed deals begin contributing to revenue, and AI bookings convert into sales. The firm also said Accenture's roughly $9 billion in operational technology cybersecurity acquisitions and its Accenture Edge platform are expected to contribute modestly in fiscal 2027 and could establish higher-growth opportunities beginning in fiscal 2028.
The broader IT services sector has also felt the impact. Indian IT firms such as TCS and Infosys led a rout after Accenture cut its revenue forecast, highlighting the interconnected nature of the industry. Meanwhile, other tech stocks have seen divergent fortunes; for instance, Micron surged 10% as analysts boosted targets on AI-driven memory demand, underscoring the uneven impact of AI across sectors.
This article is for informational purposes only and does not constitute financial advice.
