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On Wednesday, RBC Capital Markets adjusted its outlook on AECOM Technology (NYSE:ACM), raising the firm’s price target on the shares to $125 from $124, while reiterating an Outperform rating. The decision came after AECOM’s announcement of favorable fiscal first quarter results and a slight increase to the lower end of its fiscal year 2025 adjusted EBITDA and EPS guidance. According to InvestingPro data, AECOM, with its $14 billion market cap, has demonstrated solid revenue growth of 8.9% over the last twelve months.
Sabahat Khan of RBC Capital Markets noted the company’s positive start to the year, emphasizing that the results and updated guidance should mitigate some concerns surrounding the Engineering sector. According to Khan, AECOM’s performance is aligning with its initial projections for the year, and the demand environment remains stable. This view is supported by the broader analyst consensus, with InvestingPro showing analyst price targets ranging from $102 to $130, suggesting potential upside from current levels.
AECOM’s recent financial disclosures have shown the company’s ability to navigate the current market conditions effectively. The slight enhancement in the fiscal 2025 projections indicates confidence in the company’s operational stability and growth prospects. InvestingPro analysis reveals the company maintains a "GOOD" financial health score, with notably low price volatility - one of several key insights available in the comprehensive Pro Research Report covering this prominent player in the Construction & Engineering industry.
The revised price target reflects a modest but positive adjustment, signifying a continued endorsement of AECOM’s market position and strategy. Khan’s comments suggest that RBC Capital Markets views the company’s trajectory favorably, with expectations for consistent performance in line with initial guidance for the year.
Investors and market watchers are likely to monitor AECOM’s progress throughout the year to see if the company continues to meet or exceed the financial targets set forth in its guidance. The Engineering sector, as a whole, will also be under scrutiny to determine if AECOM’s results are indicative of broader trends within the industry.
In other recent news, AECOM has outperformed Q1 estimates and adjusted its FY2025 guidance upwards. The global infrastructure consulting firm reported adjusted earnings per share of $1.31 for the fiscal first quarter, exceeding analyst estimates of $1.11. Revenue was reported at $4.01 billion, significantly surpassing the consensus forecast of $1.79 billion. AECOM’s net service revenue, excluding pass-through costs, grew 5.5% year-over-year to $1.80 billion, with the company’s Americas segment witnessing an 8% growth, driven by a 9% increase in the design business.
AECOM’s management has raised its FY2025 adjusted EPS guidance to a range of $5.05-$5.20, above the $5.10 analyst consensus, and expects adjusted EBITDA of $1,175 million to $1,210 million, representing 9% growth at the midpoint. The company also highlighted robust market trends and record backlog levels, which increased 4% year-over-year to $23.9 billion, with a book-to-burn ratio of 1.2x in its design business.
These recent developments are part of AECOM’s strategic growth plan, as the company reiterated its target of reaching a 17% margin exit rate by the end of fiscal 2026, supported by continued growth and strategic investments.
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