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Accenture (NYSE: ACN) is grappling with a significant revenue setback as the US administration implements aggressive federal spending cuts. The Department of Government Efficiency, under the leadership of Elon Musk, is spearheading these reductions, leading to delays and cancellations of federal contracts.
This development has particularly impacted Accenture’s US federal services unit, which constitutes approximately 8% of its total revenue. Following the announcement, Accenture’s shares experienced a decline of over 6%. In a related development, President Trump is anticipated to sign an executive order to dismantle the Department of Education, a move that has also affected IBM, a major vendor for the department.
Impact of Federal Budget Cuts on Accenture and IBM
The recent federal budget cuts have had a notable impact on Accenture’s stock performance. As of March 20, 2025, at 12:13 EDT, Accenture’s stock price stood at $301.58, reflecting a decline from the previous close of $324.47.
The stock opened at $296.15, hitting a day low of $291.55 and reaching a day high of $306.85. Over the past 52 weeks, the stock has fluctuated between a low of $278.69 and a high of $398.35. Despite the current downturn, market analysts maintain a “Buy” recommendation with a target mean price of $390.92, suggesting potential for recovery. Accenture’s market capitalization is valued at $188.63 billion, and it offers a dividend yield of 1.82%.
IBM has also felt the effects of potential changes within the US government, particularly with President Trump’s expected executive order to dismantle the Department of Education. As a key vendor for the department, IBM’s stock has seen a decline. On March 20, 2025, IBM’s stock price was $243.40, down from the previous close of $252.29.
Over the past year, IBM’s stock has ranged from $162.62 to $266.45. Despite the current dip, analysts have issued a “Buy” recommendation with a target mean price of $254.51, indicating confidence in the company’s long-term performance.
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ACN and IBM Stock Brief
Accenture’s financial metrics reveal a trailing P/E ratio of 25.26 and a forward P/E ratio of 21.43. The company’s book value stands at $46.703, with a price-to-book ratio of 6.46. The debt-to-equity ratio is 27.06, indicating a relatively stable financial position. Accenture’s total revenue is reported at $66.36 billion.
Meanwhile, IBM’s trailing P/E ratio is 37.97, with a forward P/E ratio of 22.94. The company’s book value is $29.48, and the price-to-book ratio is 8.26. IBM’s debt-to-equity ratio is significantly higher at 213.18, reflecting a different financial strategy. The total revenue for IBM is $62.75 billion.
Both Accenture and IBM have received positive analyst recommendations despite recent stock fluctuations. Accenture’s recommendation mean is 1.76, with a target high price of $455.00 and a target low price of $323.00. For IBM, the recommendation mean is 2.43, with a target high price of $320.00 and a target low price of $160.00.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
