U.S. Markets closed

AECOM-Hill JV Secures $107M Design-Build Program Contract

Zacks Equity Research

AECOM-Hill, a joint venture led by AECOM ACM with Hill International, Inc. HIL, has won a $107.4-million contract from the New York City Department of Design and Construction (“DDC”) to develop four new correctional facilities in Manhattan, Brooklyn, Queens and the Bronx.

Per the deal, AECOM-Hill will work as Program Management Consultants for four new borough-based facilities that will enable closure of the Rikers Island Correctional Facility. AECOM-Hill, together with DDC, will assemble and develop program requirements, and manage design-build teams until the completion of this multi-billion capital program.

This first ever design-build state-of-the-art program will make significant improvements for people in detention, their families and employees of the NYC Department of Correction. These correctional facilities will be integrated with health, educational and re-entry programs, along with community space.

The joint venture strengthens this complex program with Hill’s expertise in in-depth risk and project management insight, along with AECOM’s extensive design-build, program management, and correctional sector experience.

Notably, the value of this contract will be included in Design and Consulting Services ("DCS") backlog in third-quarter fiscal 2019.

AECOM has a diversified business that comprises both designing and construction services. The company has been witnessing robust prospects across segments over the last few quarters. In the fiscal second quarter, its backlog increased 22% year over year. New order wins were also up 17% from the prior-year period.

In the DCS segment, the company is currently pursuing a multi-billion-dollar pipeline of opportunities. The solid backlog levels indicate significant growth opportunities in the forthcoming quarters.

Markedly, shares of AECOM have outperformed its industry so far this year. The stock has gained 19.1% compared with its industry’s 14.3% rally in the said period. Estimates for fiscal 2019 have moved up 1.1% in the past 60 days, raising analysts’ optimism surrounding the company’s earnings growth potential.

Zacks Rank & Other Key Picks

Currently, AECOM carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the same space include Altair Engineering Inc. ALTR and Quanta Services, Inc. PWR. While Altair sports a Zacks Rank #1 (Strong Buy), Quanta Services carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altair Engineering and Quanta Services’ earnings for the current year are expected to increase 53.7% and 28.8%, respectively.

The Could Be the Fastest Way to Grow Wealth in 2019

Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.

These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.

Click here to see these breakthrough stocks now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Quanta Services, Inc. (PWR) : Free Stock Analysis Report
AECOM (ACM) : Free Stock Analysis Report
Altair Engineering Inc. (ALTR) : Free Stock Analysis Report
Hill International, Inc. (HIL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research