Listen, I hate to be this guy, but when one consulting giant starts bleeding out in public, and the other one pretends it's just a flesh wound… then it’s delusional. Booz Allen just let the world know that its Civilian practice is under pressure (translation: Uncle Sam’s checkbook isn’t opening like it used to), and yet TD Cowen looked at Accenture and said, “Buy.” Not sell, not hold… but “Buy”, with a straight face and a $336 price target. 

(Source: Giphy) 

In short, Booz Allen’s civilian business isn’t some isolated incident. It’s a canary in a room full of carbon monoxide. Government spending on contractors is getting slashed, agencies are ghosting vendors, and everyone’s pretending it’s smooth sailing while quietly updating their LinkedIn profiles (read: Booz Allen expects to reduce its workforce by 7% during its Q1). But instead of grappling with that, TD Cowen is roleplaying as a growth bull… saying Accenture might face a little -1% headwind, all while ignoring the only real data we’ve gotten in weeks. 

(Source: Yahoo Finance) 

Accenture’s sitting at $309 and change, with a market cap just shy of $200 billion. Decent numbers, sure. But if you think that valuation is safe while the federal government is on a crash diet and enterprise clients are cutting back on external vendors like they’re doing Dry January, then you have another thing coming. And yet, the sell-side continues to treat Accenture like it’s immune to gravity. The logic goes: Booz Allen is getting wrecked, so Accenture might feel a slight breeze. That’s the whole thesis. No one mentions the fact that Accenture is also heavily exposed to government work, or that it’s been quietly hedging its core business by throwing money at AI, cloud features, and whatever other tech trend that’s getting investors hot and bothered that week. 

Of course, TD Cowen says we’ll know more after the June 20 earnings call. But even still, it’s hard to imagine while Booz Allen is absolutely bleeding from its civilian accounts, Accenture is going to walk away clean. The only difference is that Accenture hasn’t said it out loud yet. They’re still busy announcing a new partnership every 48 hours to distract from the fact that federal dollars are drying up like investor patience. 

(Source: Giphy) 

To be fair, other firms aren’t buying the hype as much as TD Cowen, but they aren’t completely dismissing it either. BMO is playing it safe with a “Market Perform” and a $355 target, meanwhile, Piper Sandler is openly saying AI and automation are dragging down IT services, but then throws Accenture a bone by calling them a “potential beneficiary.” However, the problem here is that while Accenture has spent years positioning itself as the safe bet in consulting… that was all before the government got frugal and companies realized they could replace half their consultants with a ChatGPT subscription and a Red Bull. If that trend continues, Accenture’s $336 price target won’t just be wrong… it’ll be comedy. 

As for investors, do what you will with this information. Just don’t pretend you weren’t warned when the “Buy” ratings get downgraded to “well, we were wrong”. Booz Allen already told you what’s coming. Accenture or TD Cowen just hasn’t gotten the memo yet. Meaning, keep your head on a swivel and place your bets accordingly, friends. Until next time… 

Stocks.News does not hold positions in companies mentioned in the article.