Accenture Plc (ACN) Stock Forecast & Price Target

Accenture has reported strong performance with advanced AI bookings reaching $2.2 billion, reflecting a sequential growth of approximately 22%, highlighting the increasing adoption of AI solutions among its client base. The company has significantly improved its operating margins, achieving 15.1%, with a year-over-year increase of 10 basis points on an adjusted basis, alongside a solid utilization rate of 93%. As Accenture continues to expand its partnerships, with over 60% of revenues derived from its top 10 ecosystem partners growing 9% year-over-year, the firm is also poised for financial strength with plans to return an additional $1 billion to shareholders and a 10% dividend increase in FY26.

Accenture has reported a flat performance in its Health & Public Service segment, with a slight decline of 1% in local currency terms, indicating potential stagnation in this key area, exacerbated by a significant 270 basis point drop in operating margins year-over-year due to business optimization actions. Despite the expectation of mergers and acquisitions driving incremental top-line growth, there remain serious investor concerns regarding cyclical and structural risks to earnings estimates, compounded by a contraction in gross margins. Additionally, the projected 7% year-over-year decline in free cash flow in FY26, alongside increased capital expenditures, underscores the challenges Accenture faces in maintaining financial stability in the current market environment.