DALLAS - AECOM (NYSE: ACM), a global infrastructure firm with a market capitalization of $14.18 billion, has reported a significant increase in contract wins in the UK water sector under the new Asset Management Period 8 (AMP8). The company announced a 100% success rate in recompeting for contracts, with the expected framework value more than doubling compared to the previous Asset Management Period 7 (AMP7). According to InvestingPro data, AECOM's stock has delivered a robust 21% return over the past six months, reflecting investor confidence in its growth strategy.
The AMP8, overseen by Ofwat, the UK's water services regulation authority, spans from 2025 to 2030 and is set to include approximately $104 billion in investments, a 77% increase from AMP7. These funds are earmarked for enhancing the reliability, sustainability, and digitalization of water infrastructure in England and Wales.
AECOM's recent achievements include securing major professional service frameworks for Thames Water and Southern Water, as well as an additional role in supporting Southern Water's $4.8 billion capital delivery program. The company attributes its success to the high-quality tender submissions and direct involvement of company leadership in the bidding process. InvestingPro analysis shows AECOM maintains a "GOOD" overall financial health score, with particularly strong marks in growth and profitability metrics. Analysts remain optimistic about the company's prospects, with price targets ranging from $98 to $130 per share.
Beverley Stinson, chief executive of AECOM's global Water business, stated that their industry-leading expertise has positioned them well for growth. The company aims to more than double its Water practice within the next five years. AECOM plans to work closely with UK water utilities to achieve their infrastructure goals, leveraging global capabilities to deliver sustainable water services.
Colin Wood, chief executive of AECOM's Europe and India region, expressed pride in the company's longstanding role as a trusted advisor to UK water utilities. He emphasized the company's commitment to supporting the Ofwat's vision for world-class water infrastructure.
AECOM, recognized by Engineering News-Record as the top Water design firm, offers a range of services from flood protection to water treatment and desalination. The company's fiscal year 2024 revenue was reported at $16.1 billion.
This information is based on a press release statement from AECOM. It should be noted that forward-looking statements in the release are subject to various risks, including economic conditions and industry-related challenges, which could cause actual results to differ from projections.
In other recent news, AECOM, a global infrastructure firm, has been appointed by the Austin Transit Partnership to manage the first phase of Austin's inaugural light rail transit system. The project is expected to enhance regional transportation connectivity. In other developments, AECOM board member Lydia Kennard has decided not to seek reelection at the company's 2025 Annual Meeting of Stockholders for personal reasons.
AECOM's recent financial performance has been robust, with significant margin outperformance in the fourth quarter of fiscal year 2024, resulting in a profit that exceeded expectations, although revenue fell slightly short of predictions. Analysts at Baird have responded by raising their stock price target for AECOM from $113.00 to $122.00 while maintaining an Outperform rating. Goldman Sachs (NYSE:GS) has also initiated coverage on AECOM stock with a Buy rating, indicating potential for double-digit earnings per share growth in the medium term.
AECOM is projecting adjusted earnings per share ranging from $5.00 to $5.20 for fiscal 2025, significantly above Wall Street's estimate of $4.52. These projections are based on a healthy level of contracted work, indicated by a book-to-bill ratio greater than 1.0x, and a project pipeline that grew by 10% compared to the previous year. These are the recent developments within AECOM as the company continues to demonstrate a promising financial trajectory.
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