Accenture Earnings: Mixed Quarter as Sales Continue To Be Impacted by Turbulent Macro Conditions

Wide-moat Accenture reported a mixed quarter with a tough macro environment continuing to negatively impact discretionary IT spending. While we expect Accenture to attract a sizable portion of IT spending when macro conditions normalize and discretionary IT spending accelerates, we don’t see a turnaround for the remainder of fiscal 2024. Despite the mixed results, we are raising our fair value estimate for the firm to $292 from $271 primarily due to changes to our working capital assumptions and the time value of money. While investors were disappointed with Accenture’s financial results, sending the company’s shares down more than 8% following the earnings report, we still view Accenture as overvalued.