DOGE Will Keep the Pressure on Accenture Stock, Analysts Say -- Barrons.com

Angela Palumbo

Accenture analysts are weighing the risks to the consulting company amid the federal government's cost-cutting plans.

Accenture reported better-than-expected fiscal-second-quarter earnings on Tuesday, but shares still fell 7.3% following the report. Management said on the earnings call that because the new presidential administration has goals to run the federal government more efficiently, "many new procurement actions have slowed, which is negatively impacting our sales and revenue."

"While results and guidance were solid, ACN had a tough needle to thread given the combination of DOGE/macro risks against slightly improving fundamentals," Deutsche Bank analyst Bryan Keane wrote in a note where he cut his price target on Accenture stock to $290 from $365 and maintained a Hold rating.

The Department of Government Efficiency, or DOGE, was created by Donald Trump's administration and headed by billionaire Elon Musk. It has the goal of cutting federal spending, and those cuts pose a risk to Accenture. Chief Executive Julie Sweet said on the earnings call that federal contracts represented about 8% of global revenue and 16% of Americas revenue in 2024.

TD Cowen analyst Bryan Bergin wrote in a note that while the impacts of DOGE on Accenture are still uncertain, they're a "headwind nonetheless."

"New procurement actions spurred by DOGE scrutiny have slowed and understandably will impact bookings," Bergin added. He cut his price target on Accenture stock to $365 from $394, but maintained a Buy rating, as "uncertainty is factored into its 2H25 guide."

UBS analyst Kevin McVeigh cut his price target on Accenture stock to $387 from $455 while maintaining a Buy rating.

"Accenture suggested that they have seen no change in demand environment which is 'still constrained' despite stable pricing vs. deteriorating last year. That said the implications of policy uncertainty are still being discounted by the market," McVeigh wrote in a note.

Shares of Accenture were up 0.1% Friday to $301.53. The stock has dropped 14% this year.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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March 21, 2025 12:57 ET (16:57 GMT)

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