Results: Accenture plc Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week, you might have seen that Accenture plc (NYSE:ACN) released its second-quarter result to the market. The early response was not positive, with shares down 9.4% to US$338 in the past week. Accenture reported US$16b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.63 beat expectations, being 5.3% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Accenture

Following last week's earnings report, Accenture's 24 analysts are forecasting 2024 revenues to be US$65.3b, approximately in line with the last 12 months. Per-share earnings are expected to increase 5.0% to US$11.74. In the lead-up to this report, the analysts had been modelling revenues of US$66.2b and earnings per share (EPS) of US$11.81 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$386. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Accenture, with the most bullish analyst valuing it at US$440 and the most bearish at US$292 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Accenture's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Accenture is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Accenture going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Accenture that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.