Accenture Earnings: Despite a Soft Quarter, Firm on Track for Future Upside

Wide-moat Accenture reported fiscal 2023 third-quarter results that narrowly missed our expectations on revenue and operating margin. While the business continues to operate in a turbulent macroenvironment, we see its business optimization actions and investment in cloud and artificial intelligence as signals of strength. As we near the end of the fiscal year, management moderated its full-year guidance, revising down estimates for revenue growth and EPS. We are, however, confident in the firm's ability to drive long-term future margin expansion, and therefore we maintain our $258 fair value estimate. Even with shares down around 3% after the earnings release, we continue to view the shares as overvalued.