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On Wednesday, RBC Capital Markets adjusted its price target on shares of AECOM Technology (NYSE:ACM), increasing it to $126 from $123, while maintaining an Outperform rating on the company. The adjustment follows AECOM’s release of favorable second fiscal quarter results and a slight increase in its adjusted EBITDA and EPS guidance for fiscal year 2025. InvestingPro data shows AECOM as a prominent player in the Construction & Engineering industry, with a market capitalization of $13.55 billion and strong momentum, having delivered an 11.6% return over the past year.
Sabahat Khan of RBC Capital remarked on AECOM’s performance, noting the company’s successful quarter which saw adjusted EBITDA surpassing analyst expectations, though net service revenue (NSR) was slightly below projections. The adjusted earnings per share (EPS) also exceeded estimates. The company’s EBITDA stands at $1.15 billion for the last twelve months, with a P/E ratio of 22.12. Despite concerns related to the Department of Defense’s (DoD) budget and projects, which had been anticipated to impact the company’s performance, AECOM demonstrated resilience with strong trends in the U.S. market. According to InvestingPro, three analysts have recently revised their earnings estimates upward for the upcoming period.
AECOM did experience some shifts in U.S. federal government contracts, with approximately $100 million worth of contracts removed from its backlog, and a few project delays and deferrals. However, the overall U.S. business outlook remains robust, supported by a book-to-burn ratio of 1.2x in the U.S. Design business and a backlog that has reached a record high.
The company’s report has assuaged some concerns regarding potential disruptions in the U.S. due to policy changes from the new administration. AECOM’s exposure to the U.S. federal government stands at about 9-10% of its NSR. The firm’s ability to maintain a strong position despite these challenges has been highlighted by RBC Capital as a testament to its well-established footing for the remainder of fiscal year 2025 and beyond.
In other recent news, Aecom Technology Corporation reported its financial results for the second quarter of 2025, surpassing earnings expectations with an adjusted EPS of $1.25, beating the forecasted $1.20. However, the company fell short on revenue, posting $1.87 billion compared to the anticipated $1.91 billion. Despite this revenue miss, Aecom raised its midpoints of EBITDA and EPS guidance for the year, indicating confidence in sustained growth. The company achieved a record net service revenue and improved its segment adjusted operating margin by 90 basis points to 16.1%. Aecom’s adjusted EBITDA increased by 8% to $290 million, reflecting strong operational efficiency. The company continues to invest in AI, digital initiatives, and infrastructure projects, which are expected to support future growth. Furthermore, Aecom returned $110 million to shareholders through share repurchases and dividends, demonstrating its commitment to shareholder value. Analyst firms such as Bank of America and RBC Capital Markets have engaged with Aecom, reflecting ongoing interest and analysis from the financial community.
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