AECOM (ACM) to Support the Development of $1.5B SRB Project
AECOM ACM has been selected by Amtrak to support the development of $1.5 billion Susquehanna River Rail Bridge (SRB) Project.
The project aims to enhance rail connectivity and safety along the U.S. Northeast Corridor. It involves replacing the current 117-year-old two-track bridge in Maryland with two new bridges, aiming to boost capacity and reliability for both freight and passenger trains.
SRB Project's complexity demands a team that combines global expertise with local insight, bringing together the necessary disciplines and resources.
Per the deal, the company will offer various professional services, such as project management, design coordination, stakeholder coordination and schedule management. AECOM will lead a strong technical team of subconsultants, including Disadvantaged Business Enterprise firms, aiming to provide opportunities for individuals facing social and economic disadvantages to actively participate and benefit from the project's economic growth.
AECOM is optimistic in this regard and continues to support Amtrak in delivering high-quality, on-time, state-of-the-art infrastructure that will transform transportation for the region.
Share Price Performance
AECOM has been gaining from high-returning organic growth initiatives. In the first quarter of fiscal 2024, revenues of $3.9 billion rose 15% on a year-over-year basis. Adjusted net service revenues (NSR) moved up 7% to $1.71 billion. Organic NSR in the design business recorded year-over-year growth of 8%, led by the water and transportation markets, and 9% growth in the Americas.
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In the past six months, shares of the company have risen 4.3% compared with the Zacks Engineering - R and D Services industry’s 15% growth. Although shares of AECOM have underperformed its industry, its solid backlog level depicts strong growth potential. As of the fiscal first-quarter end, total backlog came in at $39.81 billion. The current backlog level includes 56.5% contracted backlog growth.
During the fiscal first quarter, the record-high 9% growth in the design business backlog (on a constant-currency basis) was driven by a near-record win rate and continued strong end-market trends. The contracted backlog in the design business rose 17%, supported by funding strength across the key markets.
AECOM currently has good visibility of strong backlog and pipelines for the upcoming quarters. The company’s solid backlog levels, which are key indicators of future revenue growth, indicate significant opportunities in the forthcoming quarters.
Zacks Rank & Key Picks
AECOM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks that warrant a look in the sector are as follows:
Advanced Drainage Systems, Inc. WMS currently sports a Zacks Rank of #1 (Strong Buy). WMS delivered a trailing four-quarter earnings surprise of a whopping 37.1%, on average. The stock has risen 28.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Advanced Drainage Systems’ 2024 earnings per share (EPS) has increased to $5.88 from $5.65 over the past 30 days.
Masco Corporation MAS currently carries a Zacks Rank #2 (Buy).
Estimates for Masco’s EPS for 2024 have increased to $4.12 from $3.98 over the past 30 days. This leading manufacturer of branded home improvement and building products has a trailing four-quarter earnings surprise of 23.4%, on average. Shares of MAS have rallied 35% in the past six months.
Armstrong World Industries, Inc. AWI currently carries a Zacks Rank of #2. AWI delivered a trailing four-quarter earnings surprise of 13.1%, on average. It has jumped 67% in the past six months.
The Zacks Consensus Estimate for Armstrong World Industries’ EPS for 2024 has increased to $5.65 from $5.52 over the past 30 days.
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