Accenture plc (ACN)

• Period

  Q1 FY2026, ended November 30, 2025; reported December 18, 2025

  Revenue

  $18.74 billion, up 6% in U.S. dollars and 5% in local currency.

  Margins

  GAAP operating margin was 15.3%, down from 16.7% a year earlier; adjusted operating margin was 17.0%, up 30 basis points.

  Eps

  GAAP diluted EPS was $3.54, down 1% year over year; adjusted EPS was $3.94, up 10%.

  Bookings

  New bookings were $20.94 billion, up 12% in U.S. dollars and 10% in local currency.

  Expectations

  Third-party earnings data reported adjusted EPS expectations near $3.74 and revenue expectations near $18.78 billion. Adjusted EPS beat, while revenue was approximately in line or slightly below that estimate; the consensus figures are secondary-source estimates.

  Guidance

  Management maintained FY2026 local-currency revenue-growth guidance of 2% to 5%, or 3% to 6% excluding an estimated 1% U.S. federal-business impact. Adjusted EPS guidance was $13.52 to $13.90.

  Interpretation

  The quarter was operationally solid, but the year-over-year GAAP margin and EPS declines reinforced concern that restructuring costs, higher taxes, and slower underlying growth were offsetting revenue gains.

• Period

  Q2 FY2026, ended February 28, 2026; reported March 19, 2026

  Revenue

  $18.04 billion, up 8% in U.S. dollars and 4% in local currency.

  Margins

  Operating margin was 13.8%, up from 13.5% a year earlier; operating income increased 11% to $2.49 billion.

  Eps

  Diluted EPS was $2.93, up 4% year over year.

  Bookings

  New bookings reached a record $22.11 billion, up 6% in U.S. dollars but only 1% in local currency.

  Expectations

  Third-party consensus data showed approximately $2.84 to $2.86 EPS and $17.80 billion to $17.83 billion of revenue. Accenture exceeded those estimates.

  Guidance

  FY2026 local-currency revenue-growth guidance was raised to 3% to 5%, or approximately 4% to 6% excluding the federal-business impact. Adjusted EPS guidance was raised to $13.65 to $13.90 and free-cash-flow guidance to $10.8 billion to $11.5 billion.

  Interpretation

  The earnings beat did not fully resolve the market's concern because local-currency growth remained modest and the booking increase was much weaker than the headline U.S.-dollar figure suggested.

• Period

  Q3 FY2026, ended May 31, 2026; reported June 18, 2026

  Revenue

  $18.72 billion, up 6% in U.S. dollars but only 3% in local currency.

  Margins

  Operating margin expanded 20 basis points to 17.0%.

  Eps

  Diluted EPS was $3.80, up 9% year over year.

  Bookings

  New bookings were $19.32 billion, down 2% in U.S. dollars and 3% in local currency from the prior-year quarter.

  Expectations

  Third-party consensus data reported EPS expectations of approximately $3.70 to $3.71 and revenue expectations of approximately $18.78 billion. EPS beat, while revenue missed slightly.

  Guidance

  Management cut FY2026 local-currency revenue-growth guidance to 3% to 4%, from 3% to 5%, or approximately 4% to 5% excluding an estimated 1% federal-business impact. Adjusted EPS guidance became $13.78 to $13.90.

  Market Reaction

  Shares fell sharply on June 18, 2026, with contemporaneous reports describing an approximately 16% decline, despite the EPS beat. The main triggers were the lower full-year revenue outlook, weaker bookings, and softer-than-expected fourth-quarter revenue guidance of $17.75 billion to $18.40 billion.

  Interpretation

  This was the clearest evidence behind the rut: current profitability remained strong, but forward demand indicators deteriorated and management's lower outlook implied that the revenue slowdown was not merely a one-quarter anomaly.

• Date

  December 18, 2025

  Event

  The stock was pressured despite Q1 adjusted EPS growth because GAAP EPS and GAAP operating margin declined year over year, while investors remained focused on whether AI would reduce traditional consulting and implementation demand.

• Date

  March 19, 2026

  Event

  The company reported a strong Q2 beat and raised guidance, but the stock did not receive a durable re-rating because local-currency bookings growth was only 1% and the market continued to question the durability of consulting demand.

• Date

  June 18, 2026

  Event

  The largest recent earnings-related selloff followed the Q3 report. Accenture cut full-year revenue-growth guidance, reported a local-currency bookings decline, and gave a fourth-quarter revenue range below prevailing expectations.

• Date

  September 14, 2026

  Event

  Wells Fargo downgraded Accenture from Overweight to Equal Weight and set a $194 price target.

• Date

  September 18, 2026

  Event

  Guggenheim downgraded Accenture from Buy to Neutral and removed its prior price target, citing a rebound in the share price without corresponding evidence of improved demand in its channel checks.

• Organic growth is slowing. Q3 local-currency revenue growth was 3%, while local-currency bookings declined 3%.
• Consulting growth is weaker than managed-services growth. In Q3, consulting revenue rose only 1% in local currency versus 5% for managed services.
• The company remains exposed to the U.S. federal market. Management estimated that federal weakness would reduce FY2026 local-currency growth by approximately 1 percentage point.
• Generative AI could compress the traditional labor pyramid by automating portions of coding, testing, analytics, documentation, and lower-level implementation work. That could reduce billable hours, pricing power, or headcount requirements even if AI-related demand grows.
• Accenture is spending heavily to reposition around AI, acquisitions, cybersecurity, and new platforms. The strategy could require sustained investment before producing enough incremental revenue to offset pressure on legacy work.
• Q1 FY2026 included $308 million of business-optimization costs, primarily related to employee severance. Although these costs are excluded from adjusted results, they show that management is already resizing parts of the workforce.

• Corporate clients remain selective with discretionary consulting projects and large transformation programs when economic visibility is poor.
• Government budget uncertainty is directly affecting Accenture's federal business.
• The consulting and IT-services sector is being repriced around the possibility that AI increases client productivity faster than it creates new services revenue.
• Higher long-term interest rates can compress the valuation multiple applied to a lower-growth services company. On September 29, 2026, the 10-year Treasury yield was reported at approximately 5.25%, creating an additional valuation headwind.
• Foreign-exchange movements can make U.S.-dollar results look better than underlying local-currency demand. Q3 revenue grew 6% in dollars but only 3% in local currency.

Current Snapshot

The supplied scanner snapshot shows a price of $177.12 and a trailing P/E of 14.14.

Forward Valuation

Against management's FY2026 adjusted EPS guidance midpoint of approximately $13.84, the stock trades at roughly 12.8 times guided adjusted EPS. Against the GAAP EPS midpoint of approximately $13.44, it trades at roughly 13.2 times guided GAAP EPS.

Cash Flow

The supplied free-cash-flow figure of approximately $10.87 billion implies a cash-flow yield of roughly 9% to 10% using a market value near $118 billion. This is attractive if cash flow is durable, but less compelling if AI causes a lasting reduction in revenue or margins.

History

A contemporaneous valuation screen placed Accenture's recent trailing P/E near 14 times versus approximately 21 to 37 times at several prior fiscal year-ends. The stock is therefore materially below its own recent valuation range, but the historical premium was supported by more consistent high-single-digit growth.

Peers

The same peer screen cited Cognizant at approximately 12.6 times earnings. Accenture is therefore no longer valued at a large premium to a major IT-services peer, although exact peer multiples vary with earnings dates and estimates.

Assessment

The valuation looks inexpensive on reported cash flow and guided earnings, but the discount may be rational if investors believe normalized growth has shifted from high single digits toward low single digits or lower.

Latest Reported

As of September 15, 2026, short interest was approximately 24.82 million shares, or 3.72% of public float, with about 5.5 days to cover.

Interpretation

Short interest is meaningful but not extreme. It indicates skepticism without providing evidence of a crowded, mechanically vulnerable short position.

• Wells Fargo: Overweight to Equal Weight on September 14, 2026; $194 price target.
• Guggenheim: Buy to Neutral on September 18, 2026; prior price target removed.
• Other reported 2026 actions included TD Cowen maintaining Hold while raising its target to $173, Citigroup maintaining Neutral with a $190 target, and Morgan Stanley maintaining Equal Weight with a $175 target. These actions suggest a divided but cautious analyst view rather than a uniform collapse in confidence.

• Accenture continues to produce substantial cash flow, maintains a strong balance sheet, and returns significant capital through repurchases and dividends.
• Q3 operating margin of 17.0% and EPS growth of 9% show that the company can protect profitability even while revenue growth slows.
• AI could expand Accenture's addressable market if clients need help redesigning processes, modernizing data estates, deploying agents, and governing enterprise AI at scale.
• Management reported more large AI transformation programs and 104 quarterly client bookings above $100 million year to date through Q3, up 13% year over year.
• The stock's compressed multiple leaves room for a recovery if organic growth stabilizes without requiring a return to its former premium valuation.
• The planned October 14, 2026 Investor Day could provide more detail on AI monetization, bookings, workforce productivity, acquisitions, and medium-term margins.

• AI may be a net accelerator of client productivity but a net reducer of Accenture's billable labor demand, especially in lower-value consulting and implementation work.
• Q3 bookings declined in local currency and consulting revenue grew only 1% in local currency, which is consistent with more than a temporary macro pause.
• Management has reduced revenue guidance despite reporting EPS beats, suggesting cost control and buybacks are currently doing more work than top-line acceleration.
• If clients delay large transformation programs while experimenting with internal AI tools, Accenture could face several years of weak bookings before the new AI services market scales.
• The stock has already rebounded from its June trough, making the September analyst downgrades relevant: a low multiple alone may not be enough to attract buyers if demand evidence remains weak.

• Q4 FY2026 revenue should land at or above the upper half of the $17.75 billion to $18.40 billion guidance range.
• Local-currency bookings growth should return to positive mid-single-digit territory, with consulting bookings improving rather than growth coming mainly from managed services.
• Management should stabilize or raise FY2027 organic revenue-growth expectations instead of relying primarily on acquisitions or foreign-exchange benefits.
• AI-related bookings and revenue should become large, repeatable, and economically attractive enough to offset price or volume pressure in legacy services.
• Operating margin should remain at least stable while Accenture increases AI investment, demonstrating that modernization is not merely replacing profitable work with lower-margin revenue.
• U.S. federal demand should stop subtracting from growth, and the company should show improvement in Health and Public Service, which was among the weaker industry areas.

• Date

  October 1, 2026

  Catalyst

  Q4 FY2026 earnings release and conference call. Key items are revenue versus the $17.75 billion to $18.40 billion range, Q4 bookings, FY2027 commentary, consulting versus managed-services growth, and AI monetization.

• Date

  October 14, 2026

  Catalyst

  Accenture Investor Day. This is the most important scheduled event for clarifying the long-term AI opportunity, medium-term growth algorithm, margin outlook, acquisition strategy, and workforce implications.

• At least two consecutive quarters of positive mid-single-digit local-currency bookings growth.
• Consulting local-currency revenue growth recovering toward managed-services growth.
• Revenue growth excluding acquisitions and foreign exchange returning to approximately 5% or higher.
• Stable or improving book-to-bill, although Accenture does not always emphasize this metric consistently in its releases.
• AI-related bookings converting into recognized revenue rather than remaining primarily pipeline or promotional commentary.
• Stable adjusted operating margin despite increased AI investment.
• A narrowing gap between GAAP and adjusted earnings as business-optimization charges fade.

• Revenue, EPS, operating margin, and free cash flow remained healthy through Q3 FY2026.
• Q1 and Q2 bookings were strong in absolute dollars, and management continues to report large AI transformation programs.
• Federal spending, geopolitical uncertainty, foreign exchange, and high interest rates can explain part of the slowdown.

• Q3 local-currency bookings declined 3%, consulting revenue grew only 1% in local currency, and full-year revenue guidance was reduced.
• The market is explicitly reassessing whether AI expands Accenture's services opportunity or reduces the amount of human labor clients need to purchase.
• The stock has de-rated sharply relative to its own historical multiple, suggesting investors are pricing a lower long-term growth and margin trajectory rather than only one weak quarter.