Why Accenture Stock Flew Higher on Friday

The only significant news item about Accenture (NYSE: ACN) Friday was a positive one -- a top investment bank upgraded its recommendation on the stock and cranked its price target higher. The shares experienced a modest rally as a result, ultimately closing the day a little over 1% higher. That was high enough to beat the 0.3% rise of the S&P 500 index.

It's gold, says Goldman

The finance sector mainstay in question was Goldman Sachs. Well before market open, its analyst, James Schneider, flipped his recommendation on Accenture stock to buy from his preceding neutral. His new price target on the shares is $420 apiece, where formerly it was $370.

According to reports, Schneider pointed out that the company is the top provider in the world for its specialty, IT services. Its time is coming, the pundit believes, as cyclical headwinds from client industries like finance and healthcare are starting to fade. In fact, Accenture is one of the businesses best positioned to benefit from this development.

The analyst also touched on the company's embrace of artificial intelligence (AI), writing that it has excellent generative AI capabilities. As such, it's sure to be a partner of choice for businesses wanting to expand their involvement with this white-hot technology.

Open those coffers

Accenture has a very wide and broad client base, so it might be a bit over-optimistic to believe that higher budgets in a few will juice Accenture's fundamentals. Yet a rise in spending on IT services by various types of businesses is entirely realistic to expect, especially in regards to AI. Accenture doesn't feel like a screaming buy to me, but it's certainly a stock worth keeping an eye on.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc and Goldman Sachs Group. The Motley Fool recommends the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool has a disclosure policy.