Mizuho Securities analysts reiterated a Buy rating and a price target of $426 on Accenture (NYSE:ACN) on Tuesday.
The broker says operational expenditure (opex) trends of the S&P 500 companies provide a good gauge for spending patterns in IT Services across the markets where Accenture operates.
“Our proprietary index of 10+ years of quarterly opex growth trends for the S&P 500 constituents vs. ACN's constant currency growth (R² 54%) points to a potential reacceleration in growth in the coming quarters,” analysts at Mizuho wrote in a note.
After several quarters of slowing expansion, opex growth in the markets Accenture serves seems to have reached its lowest point and is anticipated to pick up pace throughout 2024 and into 2025.
This marks a positive signal for Accenture's sales growth, according to Mizuho Securities.
“Consequently, we are increasingly confident in ACN's CC y/y growth accelerating throughout FY24 and estimate +3.8% for FY24 and +8.5% for FY25 (vs. +3.4% and +7.0% for consensus, respectively). Buy,” the note added.