© Reuters Accenture (ACN) Preview suggests F2Q could be at the high end of guidance – Mizuho
Analysts at Mizuho said on Wednesday that they believe Accenture’s (NYSE:) second-quarter constant currency revenue growth could come in at the high end of guidance.
The firm, which reiterated its buy rating and $426 price target on Accenture, made the comments in a research note rating the stock.
“For 2Q24, our regression analysis implies constant currency growth of -1.5% y/y, which is within the company’s guidance of -2% to +2%,” the team wrote. company analysts. They added: “However, evaluating our estimate of ACN’s GenAI revenue contribution, we believe constant currency growth of approximately 2% y/y is achievable.”
“After reporting more than $300 million in GenAI revenue for the entirety of FY23 (we estimate approximately $100 million in F3Q23 and approximately $210 million in F4Q23), ACN reported more than $450 million in GenAI revenue in the first quarter of 2024. For F2Q24, we believe approximately $845 million in GenAI revenue is not unthinkable.”
The firm said its 10-plus year predictive OpEx regression of S&P 500 constituents, combined with “rapidly growing GenAI revenue velocity,” suggests that F2Q constant currency revenue growth may tilt toward the high end of the guidance (estimate close to ~2% versus forecast -2% to +2%).