Accenture Faces Termination of $368M Air Force Project Amid Contemplation of Restart

Accenture's $368 million Air Force HR modernization project faces potential cancellation, which could impact the timeline and cost-efficiency of the project. Despite this, Wall Street analysts remain optimistic about Accenture's stock potential, with an average one-year price target of $328.25, suggesting a 33.61% upside from the current price. GuruFocus estimates also indicate a potential upside of 47.56% from the current price.

Accenture's $368 million Air Force HR modernization project, aimed at overhauling antiquated human resources systems, is facing potential cancellation. The Trump administration, seeking alternative solutions, has placed a "strategic pause" on the project, which was initially on track for its first deployment this summer [1].

The project, which was scheduled to save the Air Force $39 million annually, is now under review for potential replacement by firms like Salesforce and Palantir. The move comes as the administration looks to favor these firms, potentially leading to a costly do-over and significant taxpayer waste [1].

Despite this uncertainty, Wall Street analysts remain optimistic about Accenture's stock potential. The average one-year price target is $328.25, suggesting a 33.61% upside from the current price. GuruFocus estimates also indicate a potential upside of 47.56% from the current price [2].

Accenture, valued at $149.8 billion by market cap, has significantly underperformed the broader market over the past year. The company's stock has plunged 24.5% over the past 52 weeks and 32.2% on a YTD basis, compared to the S&P 500 Index’s 19.3% gains over the past year and 8.4% returns in 2025 [2].

The company's third-quarter results showed a notable increase in topline revenue, with a 7.7% year-over-year growth to $17.7 billion, beating Street estimates by 2.6%. However, new bookings at the end of Q3 stood at $19.7 billion, down 6% year-over-year in USD terms and down 7% in local currency, which dented investor confidence and led to a selloff [2].

The Air Force and Space Force, which were set to receive the new payroll system, have also pulled out of the project to launch yet another HR platform project led by Workday. The service put out a small business tender on May 7 for firms to research HR platform alternatives, with the goal of selecting a company that will recommend Workday as the best option [1].

The uncertainty surrounding Accenture's Air Force HR modernization project underscores the challenges faced by government contractors in the current regulatory environment. While the administration's actions aim to streamline the contracting process, they also risk significant taxpayer waste and duplication of efforts [1].

References:
[1] https://economictimes.indiatimes.com/news/international/global-trends/pentagon-risks-wasting-800-million-as-trump-administration-cancels-two-hr-software-projects/articleshow/123278805.cms
[2] https://finance.yahoo.com/news/wall-street-analysts-accenture-stock-074522441.html