Morgan Stanley Maintained Hold Rating on Accenture (ACN) Stock

Accenture plc (NYSE:ACN) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On July 28, Morgan Stanley analyst James Faucette maintained a “Hold” rating on the company’s stock and set a price objective of $325.00. The analyst’s rating is backed by a combination of factors affecting Accenture plc (NYSE:ACN)’s current and future business landscape. One important reason is its ongoing momentum in Managed Services, which is supported by the client demand for cost-saving deals.

As per the analyst, such deals tend to be long-term and support in establishing a recurring revenue stream, although the consulting segment continues to face challenges because of limited discretionary spending. Furthermore, Accenture plc (NYSE:ACN)’s Gen AI strategy is evolving, with an emphasis on integrating agentic and human-based solutions. Notably, this evolution needs new pricing structures, which can impact margins and make the development of more proprietary intellectual property necessary, added Faucette.

The analyst also highlighted the potential shift in Accenture plc (NYSE:ACN)’s investment strategy. Historically, it was dependent on acquisitions in a bid to maintain its technological edge, but now there might be a greater focus on direct development investment in the future. This transition can provide better returns on investment, although there can be a wide range of potential outcomes. Madison Investments, an investment advisor, released its Q1 2025 investor letter. Here is what the fund said:

“Accenture plc (NYSE:ACN) shares were weak in the quarter due to possible contract cancelations from the U.S. Federal government. While some lost business does seem likely, Accenture’s overall exposure to this end market is limited and the headwind appears manageable.”

While we acknowledge the potential of ACN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.