Truist Securities began coverage of Accenture (ACN) with a Buy rating and a $317 price target.
Analysts led by Arvind Ramnani said Accenture offers investors a compelling, but not riskless, way to benefit from the enterprise modernization theme (driven by generative AI, or GenAI) at a reasonable multiple with a business mix that should support mid-single digit growth and stable margins over a multi-year time horizon.
“The stock trades at a material discount to its historical average largely due to GenAI cannibalization of existing business. We think patient investors will be rewarded given ACN’s strategic partnerships with the leading frontier labs, broader GenAI ecosystem, and track-record in cannibalizing legacy revenue,” said Ramnani and his team.
Earlier on Tuesday, Accenture said it plans to acquire U.K.-based AI services provider Faculty for an undisclosed sum.
Shares of the Irish consultancy company were largely flat premarket on Tuesday.