We have issued an updated research report on AECOM Technology Corporation ACM on Dec 18, 2015. The company has been riding high on project wins and significant contracts in the ongoing quarter.
Last week, AECOM was selected by South Africa-based public electricity firm Eskom to act as a technical and quality support services specialist for construction of Eskom’s Majuba Railway Line. AECOM, under a 17-month contract with Eskom, will provide specialists for areas like structural engineering, International Federation of Consulting Engineers, environment, OHTE, rail design, rail welding, high voltage electrical and railway signaling.
Moreover, in November, AECOM collaborated with Project Frog, Inc., to form a “Rapid Deployment Team” and cater to the rising need for data centers. Apart from this, AECOM stated the integration completion of its previously acquired engineering & construction firm URS Corp. In particular, AECOM has completed the integration and co-location of 800 URS employees and also formulated a robust human resource pool comprising 4,000 employees in 25 offices across Australia & New Zealand.
However, the current volatility in the oil and gas market, with declining prices and spending levels, is affecting the company’s projects and orders especially in the Middle East. Lower capital spending on the part of major clients is proving to be a major concern for the company. Market forces that regulate client spending are beyond the company’s control and this adds to the uncertainties. AECOM expects such problems to persist in fiscal 2016 as well.
Over the last 7 days, the Zacks Consensus Estimate for fiscal 2016 earnings per share upped by a penny to $3.19. For fiscal 2017, it dipped by a penny to $3.51. Consequently, the company carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Other better-ranked stocks in the industry include Dycom Industries Inc. DY, KBR, Inc. KBR and Jiangsu Expressway Co. Ltd. JEXYY. While Dycom sports a Zacks Rank #1 (Strong Buy), both Jiangsu Expressway and KBR stocks hold a Zacks Rank #2 (Buy).
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