Aecom Beats 4Q Estimates, Raises Share Repurchase Plan To $1B; Shares Rise 4%

Aecom Technology delivered better-than-expected 4Q results and provided an upbeat earnings outlook for fiscal 2021. In addition, the infrastructure consulting firm raised its share repurchase program from $305 million to $1 billion. Shares are up almost 4% in Monday’s morning trading.

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Aecom’s (ACM) 4Q earnings of $0.60 came ahead of analysts’ estimates of $0.57 per share but declined 8% year-over-year due to lower operating margins. Its revenue of $3.57 billion rose 2% year-over-year and also exceeded the Street consensus of $3.28 billion.

“We delivered strong EBITDA growth and free cash flow, which, along with the sale of the Management Services, contributed to a substantial debt reduction and the commencement of share repurchases,” Aecom CFO Gaurav Kapoor stated. “We are committed to promoting a culture of continuous margin improvement as we march towards our 15% long-term target, and returning substantially all available cash and free cash flow to investors through share repurchases.”

As for fiscal 2021, the company anticipates earnings in the range of $2.55-$2.75, which is higher than analysts’ estimates of $2.46 per share. Adjusted EBITDA is projected in the range of $790 million-$830 million in 2021. (See ACM stock analysis on TipRanks)

On Oct. 27, Citigroup analyst Andrew Kaplowitz raised the stock’s price target to $56 (13.1% upside potential) from $50 and maintained a Buy rating. The analyst believes that the company can offer good opportunities in light of easing COVID-19-related restrictions in some geographies and healthy end market visibility.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 2 Buy ratings. The average price target stands at $53 and implies upside potential of about 7.1% to current levels. Shares have increased by about 14.8% year-to-date.