U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
On Monday, UBS analysts upgraded ABM Industries (NYSE: NYSE:ABM) stock rating to Buy from Neutral, increasing the price target to $54 from $50. The analysts noted that ABM Industries’ shares fell 9% on Friday following the company’s fiscal second-quarter results and reiterated guidance. According to InvestingPro data, the stock’s RSI suggests oversold conditions, and the company appears undervalued based on Fair Value analysis. Despite this decline, UBS believes the company’s business outlook has improved.
The analysts pointed out that the Business & Industry (B&I) segment, which accounts for approximately 50% of ABM’s sales, returned to growth with a 2.6% increase in the fiscal second quarter. This marks the first positive growth in over two years, attributed to a stabilizing office environment with positive net absorption over the past four quarters.
UBS highlighted that the positive shift in ABM’s largest segment significantly impacts the company’s overall outlook. Consequently, the firm has raised its fiscal 2026 EBITDA estimate by 2% following the quarter’s results.
The analysts remarked that the recent 9% decline in ABM’s stock appears excessive, considering several temporary issues such as the lack of guidance raise, ATS margins, and free cash flow impacting the stock. UBS sees the stock’s pullback as an opportunity given the improved business outlook. InvestingPro analysis reveals strong fundamentals with liquid assets exceeding short-term obligations and a healthy current ratio of 1.55x. Discover more insights and 8 additional ProTips for ABM Industries with an InvestingPro subscription.
In other recent news, ABM Industries reported its second-quarter financial results for 2025, highlighting a revenue increase to $2.1 billion, which marks a 4.6% rise year-over-year. The company’s adjusted earnings per share (EPS) were $0.86, slightly below the forecast of $0.87. Despite the revenue growth, the company reaffirmed its full-year adjusted EPS guidance of $3.65 to $3.80, signaling confidence in its strategic initiatives. ABM is focusing on expanding its service offerings in the Manufacturing & Distribution segment, with a notable return to organic growth in this area. The firm is also exploring mergers and acquisitions to enhance its service offerings. Analyst firm William Blair noted the company’s progress in cash flow management, which is expected to improve in the second half of the year. ABM Industries continues to see strong demand for its microgrid and technical solutions, contributing to a robust backlog of $700 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.