Baird upgraded Accenture (ACN) to Outperform from Neutral with an unchanged price target of $390. The firm says the stock has been weak the past few years on “sluggish” IT demand and more recently Department of Government Efficiency fears as U.S. federal spend was 8% of Accenture’s fiscal 2024 revenue. The analyst expects the company’s fiscal Q2 to beat estimates “mildly” and views its Managed Services demand to be strong, which is 50% of revenue. Accenture can return to favor given its “strong moat,” free cash flow and accelerating growth, and can ultimately benefit from generative artificial intelligence demand, the analyst tells investors in a research note.
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