ACN Slides After Lackluster Earnings

Accenture PLC (ACN:US) declared its 4th fiscal quarter earnings last week, dropping back to its June lows after disappointing analysts with its earnings. The company reported a 3.5% increase in sales to $15.99 billion, which fell short of expectations. The EPS on the other hand came out better than expected at $2.71. This resulted in the stock continuing its downward journey after hitting a 52-week high early in September.

Consulting revenues went down 2% while managed services showed 10% growth. While all other business segments showed growth, there was a 12% decline in the Communication, Media, and Technology group. New bookings also saw a 10% decline, which was one of the reasons the stock price could not sustain pre-earning levels.

The company raised its dividend to $1.29, which improved its dividend yield to around the 1.7% mark. However, this is still below the industry average so unlikely to be a factor that drives the stock price in the short-term.

Since the earnings announcement, quite a few analysts have lowered their price targets on the stock. BMO Capital lowered their price target from $360 to $350, Baird from $332 to $322, and TD Cowen and Piper Sandler both lowered their price targets from $312 to $300.

Accenture shareholders have had a bumpy ride over the past year, with the company being associated with data leaks as well as being awarded IRS contracts. Politicians have shown interest in the stock this year. And there hasn’t been any significant evidence to suggest whether they might be losing interest, despite the lackluster earnings.

Senator Dan Sullivan’s sale of $15,000 - $50,000 worth of stock is the only sale to stand out since June. Apart from that, Kevin Hern and Ro Khanna added to their positions in the company. Kevin Hern has been accumulating the stock for some time now having bought shares worth over half a million in the last 3 years.

ACN stock was last trading at $308.26 after hitting lows near the $295 mark during the last week.