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Accenture warned about a potential adverse impact on its topline as the Trump administration’s Department of Government Efficiency (DOGE) is hunting to cut federal costs.
Shares of Accenture Plc. (ACN) will be in focus on Monday after analysts at Bank of America (BofA) Securities expressed optimism about the company’s prospects, despite the IT service provider’s warning about demand uncertainty.
Accenture warned about a potential adverse impact on its topline as the Trump administration’s Department of Government Efficiency (DOGE) is hunting to cut federal costs.
During an analyst call after the fourth-quarter results, Accenture CEO Julie Sweet revealed that DOGE’s cost-cutting efforts have slowed down many new procurement actions. Sweet said this has already had a negative impact on the company.
“The new administration has a clear goal to run the federal government more efficiently. During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue,” said Accenture CEO Julie Sweet during a post-earnings call.
However, according to The Fly, BofA maintained that Accenture remains its top pick in the IT services sector. It observed that despite the sales pressure, DOGE risk is manageable.
If the Elon Musk-led department goes easy on discretionary spending, BofA thinks Accenture will fare better than its peers.
However, the brokerage cut its price target for the stock to $373 from $431, implying an upside of more than 22% from Friday’s closing price. It maintained a ‘Buy’ rating for Accenture.
Retail sentiment on Stocktwits around Accenture continued to remain in the ‘extremely bullish’ (83/100) territory, and message volumes remained at ‘extremely high’ levels, too.
One user thinks that the stock is “very oversold” and that long-term holders will be “rewarded.”
Data from Koyfin shows the average price target for Accenture is $363.79, implying an upside of over 19% from Friday’s closing price.
Accenture’s stock has declined by more than 13% year-to-date.
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