12:49 PM EDT, 03/17/2025 (MT Newswires) -- Accenture's ( ACN ) full-year results are on course to take a hit partly due to a wider-than-expected impact of spending cuts initiated by the Department of Government Efficiency, or DOGE, Morgan Stanley said.

The investment bank now estimates Accenture ( ACN ) to report per-share earnings of $12.88 and revenue of $68.38 billion for fiscal 2025, down from its prior projections of $12.92 and $68.57 billion, respectively.

DOGE, created by US President Donald Trump and led by Elon Musk, aims to cut federal spending. Those cutbacks and a "slightly elongated" cycle for new bookings prompted Morgan Stanley to lower its forecasts for the consulting firm, it said in a client note emailed Monday.

Accenture ( ACN ) serves both businesses and governments, including the US federal government.

Before the Trump administration took office in January, many investors expected Accenture ( ACN ) to raise the top end of its previously issued full-year revenue growth guidance of 4% to 7% in local currency. However, that no longer seems likely as a result of DOGE spending cuts impacting government contracts, along with a "marked slowdown" in industry bookings, according to Morgan Stanley.

The bank predicts the consulting firm to lift the low end of its revenue outlook by 100 basis points to a 5% increase. Morgan Stanley said Accenture's ( ACN ) bottom end assumed a substantial slowdown in demand that is yet to materialize.

"On the other hand, we think the previous top-end hadn't contemplated much of a bookings acceleration, and may have even included a scenario of slight bookings slowdown from what the company was seeing in late (2024), which we think could keep the top end within reach, at least for now," Morgan Stanley wrote in the note.

Accenture ( ACN ) is set to report its latest quarterly results on Thursday.

Morgan Stanley sees potential downward revisions to Accenture's ( ACN ) growth estimates for fiscal 2026 due to muted gains in Accenture Federal Services following the DOGE cutbacks, as well as softening discretionary spending in response to restrictive trade measures. For 2026, the brokerage forecasts EPS of $13.77 and revenue of $72.49 billion, compared with previous estimates of $14.08 and $74.06 billion, respectively.

Equities markets have been volatile in recent weeks amid US President Donald Trump's tariff plans. Trump last week said the White House will impose a 200% tariff on all alcohol products coming from the European Union if a European tariff placed on US whiskey is not rescinded. Canada and the EU recently announced retaliatory tariffs against the US.

Morgan Stanley lowered its price target on Accenture's ( ACN ) stock $372 from $380. The bank has an equal-weight rating on the stock.

Price: 323.17, Change: +4.35, Percent Change: +1.36