AECOM stock price target raised to $124 from $112.50 at BofA Securities

Investing.com - BofA Securities raised its price target on AECOM Technology (NYSE:ACM) to $124.00 from $112.50 while maintaining a Buy rating on the stock. According to InvestingPro data, AECOM currently trades at $111.94, with analyst targets ranging from $104 to $140, reflecting the stock’s potential upside. The company maintains a robust financial health score of GOOD, supported by strong profitability metrics.

The firm cited AECOM’s third fiscal quarter segment operating margin of 17.1%, which expanded 90 basis points year-over-year to reach a new record. AECOM also raised its fiscal year guidance to 16.5% from 16.1%. With revenues of $16.05 billion in the last twelve months and a return on equity of 28%, AECOM demonstrates strong operational efficiency despite facing challenges with gross profit margins.

BofA Securities noted that the higher profitability is not coming at the expense of business investment but is due to high return on spending with a win rate of approximately 50%. The company is also shifting more direct hours to enterprise capability centers, which now account for 8% of direct hours compared to 3% a few years ago.

The research firm highlighted AECOM’s robust balance sheet with net leverage of 0.6x, down from 0.8x in the previous quarter. Free cash flow was $262 million, down 4% year-over-year, but is tracking at $551 million year-to-date, representing a 27% increase from the previous year. InvestingPro analysis reveals the company operates with a moderate debt level and maintains a healthy current ratio of 1.15, supporting its strong financial position. Get access to 8 more exclusive InvestingPro Tips and comprehensive financial analysis in the Pro Research Report.

BofA Securities based its new price target on 13x 2026 estimated EBITDA, rolling forward its valuation while keeping the multiple intact, and reiterated its Buy rating citing "steady FCF visibility."

In other recent news, AECOM has been awarded significant contracts and formed strategic partnerships, reflecting a series of notable developments. The U.S. Army Corps of Engineers Europe District has selected AECOM for architecture and engineering services under two contracts with a combined ceiling of more than $490 million, supporting infrastructure projects across several European countries. Additionally, AECOM Technical Services Inc. received a $90 million modification to an existing contract for architect-engineer services from the U.S. Department of Defense. In a strategic move, AECOM has partnered with Special Integrated Logistics Zones Company to enhance Saudi Arabia’s logistics infrastructure, aligning with the kingdom’s Vision 2030 goals. AECOM’s joint venture with AtkinsRéalis has also secured a consultancy agreement for the Hong Kong Section of the Hong Kong-Shenzhen Western Rail Link. Furthermore, AECOM announced a tender offer price for its 5.125% Senior Notes due 2027 at $1,008.76 per $1,000 principal amount. These developments highlight AECOM’s active role in global infrastructure projects and financial strategies.

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