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.

Don't Miss Our Christmas Offers:

Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

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.