A day after reporting much weaker-than-expected sales amid a drop in consulting income, shares of Accenture (ACN) fell 13% on Friday as investors digested the results and analysts unleashed a string of fresh target cuts.
The Dublin-based provider of outsourcing and consulting services late Thursday axed its full-year outlook citing a troubling decline in spending by its consulting clients. Analysts on Friday reacted negatively, responding with lower estimates, price target cuts and at least one downgrade.
UBS (UBS) cut its outlook on Accenture to “neutral” from “buy” and its price target to $77 from $85 citing worsening enterprise demand and incremental softening in consulting. Jefferies (JEF) and BMO lowered their price targets to $71 and $72 respectively.
Shares of Accenture in recent trade were down more than 13% to $69.76.
Accenture still beat on the bottom line during the quarter thanks to rebounding bookings in its outsourcing business, however the focus by analysts was largely on softening consulting sales and a worsening tone by management on demand.
Revenues in the consulting business fell 2% to $3.9 billion, below the consensus of $4.16 billion.