Accenture: Weakness Ahead
Accenture will report earnings results Thursday at 8:00am ET (HERE).
We expect new bookings activity to be weak as we recently wrote (HERE) given that the global economy is anything but robust. AI will not save the economic day - despite what some would have investors believe. Consulting businesses are at the sharp edge of economic activity and we believe that activity is slower today across industry sectors versus a year ago, especially within Financial Services, Media & Telecom, Software/Technology, Banking & Insurance and more.
For what it is worth, the MD&A section of Accenture’s quarterly filings are perhaps the thinnest I have ever come across in terms of descriptive analysis. Not surprising as I believe that Accenture’s management team is weak.
Accenture would be far better served with a strong operator in the CEO chair rather than the former General Counsel and Compliance executive who leads the company today.
When the economy rolls over my guess is that there will be a 70% probability or better that Julie Sweet will retire as Accenture CEO as she is not qualified to navigate the business out of choppy seas. M&A will only get you so far.