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On Wednesday, KeyBanc Capital Markets adjusted its financial outlook for AECOM Technology (NYSE:ACM), reducing the price target on the company’s shares to $109.00 from the previous target of $121.00. Despite this change, the firm maintained its Overweight rating on the stock. According to InvestingPro data, analysts remain broadly positive with targets ranging from $102 to $140, and the stock appears slightly undervalued based on Fair Value analysis.
The revision comes as a broader market measure, with KeyBanc analysts noting a shift toward lower target multiples due to a period of diminished risk appetite in the market. However, the firm’s outlook for AECOM’s performance remains unchanged for the year. With a market capitalization of $12.47 billion and revenue growth of 8.89%, AECOM’s diverse market and geographic reach should protect the company’s prospects. InvestingPro data shows the company maintains a healthy financial profile with moderate debt levels and strong returns over the past five years.
AECOM is still expected to maintain its long-term net service revenue (NSR) growth outlook of 5-8%, with annual margin expansion of 20-30 basis points and double-digit earnings per share (EPS) growth. KeyBanc emphasized the importance of the Infrastructure Investment and Jobs Act (IIJA) funding and the modernization of infrastructure as pivotal growth drivers for AECOM in the United States.
While there is an acknowledgment of some delays in the ramp-up of UK infrastructure spending and the Asset Management Plan for the eighth period (AMP-8), the analysts predict that AECOM’s operations in the U.S. will surpass international growth in the fiscal year 2025. The firm’s confidence in AECOM is rooted in these key domestic growth drivers, despite the adjustments made to the price target. For deeper insights into AECOM’s infrastructure spending exposure and growth potential, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s market position and growth drivers.
In other recent news, AECOM reported favorable fiscal first-quarter results and slightly increased the lower end of its fiscal year 2025 adjusted EBITDA and EPS guidance. This positive financial performance led RBC Capital Markets to raise its price target for AECOM to $125, maintaining an Outperform rating. Additionally, AECOM has been awarded a significant contract as part of a joint venture to oversee the design and construction of a key section of Hong Kong’s Northern Metropolis development, focusing on innovation and technology. In another development, AECOM was chosen to partner with Sydney Water on a capital investment program aimed at revitalizing the city’s water infrastructure. The company will provide high-quality engineering design services to support Sydney’s rapid population growth and enhance climate resilience. Furthermore, AECOM’s shareholders recently re-elected its Board of Directors, ratified its independent accounting firm, and approved executive compensation during the annual meeting. Lastly, AECOM announced its involvement in a joint venture to deliver technical services for the Northern Metropolis Highway in Hong Kong, aimed at improving regional connectivity. These developments reflect AECOM’s ongoing commitment to strategic infrastructure projects and financial stability.
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