Morgan Stanley downgraded Accenture to Equalweight from Overweight. The bank lowered its price target for the stock to $177 from $240. Analysts cite concerns over slowing growth in IT services spending. A Morgan Stanley survey of Chief Information Officers indicates IT services budgets will grow by only about 2% in 2026.
Corporate spending on artificial intelligence is currently crowding out traditional IT services. Accenture historically maintains a strong position in these traditional service areas. The anticipated acceleration in IT budgets from AI pilot project returns has not yet occurred.
Morgan Stanley acknowledges Accenture's strong market position for an eventual recovery. However, the bank sees increasing uncertainty regarding the timing of any reacceleration.