Oakmark Equity and Income Fund says the market is wrong to price Accenture for AI disruption. Shares trade at the lowest P/E in 25 years and below 10x free cash flow.
Alpha Score of 50 reflects moderate overall profile with weak momentum, moderate value, moderate quality, weak sentiment.
Accenture shares fell sharply after a Q3 miss. Oakmark Equity and Income Fund is pushing back.
The fund manager said the sell-off is overdone and the market is misreading the disruption risk from AI.
Accenture reported fiscal third-quarter results that showed weaker-than-expected bookings and a below-consensus near-term revenue outlook. The stock sold off. Oakmark said the market is treating the results as proof that AI is disrupting Accenture's business model.
Oakmark said the weakness is transitory, not structural. The fund manager expects revenue growth to accelerate as enterprises begin to execute larger-scale transformation projects tied to AI.
Accenture is deeply embedded in enterprise IT roadmaps. Oakmark noted that 195 of its top 200 clients have worked with the firm for over a decade, and most of those clients spend more than $100 million annually.
The valuation is the most extreme part of the case. Shares trade for less than 10x free cash flow and at the lowest P/E multiple in Accenture's 25-year history as a public company. Oakmark said it sees the shares as "significantly undervalued" at the current price.
ACN carries an Alpha Score of 36/100 from AlphaScala, reflecting a mixed outlook. The data does not fully endorse the deep-value thesis Oakmark is pushing. It doesn't flag the stock as a disaster either. The score sits in a zone where the market narrative is contested.
The risk for Accenture is that the market is right and AI is structurally displacing traditional IT services. Bookings need to rebound in coming quarters. AI-related transformation projects need to materialize at scale for Oakmark's thesis to hold. A recovery in bookings and an acceleration in revenue growth would confirm it. The thesis breaks if bookings stay weak and clients bypass Accenture for AI-native solutions.
Oakmark held 1.0% of the fund's net assets in Accenture as of June 30. The fund manager said it continues to find the stock attractive and expects the market to eventually recognize the value.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.