Accenture Stock Struggles (ACN) Before Earnings as Consulting Leader Changes Focus to AI to Save Itself

Accenture ACN -0.33% ▼ is reporting its second-quarter results today before the market opens. As the world’s largest consulting firm, it is often the first to feel a change in how big companies spend their money. While many businesses are cutting back on general consulting, they are spending more on technology. Accenture’s stock fell 7.10% over the past 5 days, as investors weighed the risks of a global slowdown against the massive opportunities in artificial intelligence.

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Today’s Results Will Prove if Accenture’s AI Strategy Is Working

Accenture is undergoing a credibility test today as it tries to prove its AI strategy is working. Analysts are looking for a revenue of $17.84 billion and an earnings of $2.85 per share. This would represent a 6.6% jump in revenue compared to last year. The market is specifically watching for new bookings, which show how many companies have signed contracts for future work. If this number is strong, it proves that the AI boom is creating real profits.

Essentially, Accenture wants to become the partner of choice for companies using AI. The firm has already recorded billions in Gen AI bookings, showing that the demand is real and growing. By acquiring several specialized AI companies, Accenture has built a team of thousands of experts who can help clients automate their businesses. Today’s report will show if this tech focus is enough to offset the drop in traditional consulting projects.

Accenture’s Aggressive Buybacks Signal Confidence

The company continues to return massive amounts of cash to its investors through buybacks and dividends. When a company does a buyback, it takes its own shares off the market, which usually helps push the stock price higher over time. Accenture recently returned $2.33 billion to its shareholders in a single quarter through these repurchases. The company plans to return at least $9.3 billion (in both buybacks and cash dividends) in total this year, proving that management believes the stock is currently undervalued by the market.

Is Accenture a Buy or Sell Stock?

Wall Street’s consensus rating for ACN stock is a Strong Buy, with an average analyst price target of $281.78, implying upside potential of 41.8% from current levels.

ACN shares have lost about 38.70% over the past one year.

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