AECOM to Deliver Enabling Infrastructure Works to Shell


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AECOM  ACM has signed a framework agreement with Shell, under which the global engineering consultancy firm will deliver enabling infrastructure works ("EIW") for major projects globally.

To elaborate, AECOM could deliver project elements like roads, airstrips, rail, marine structures, telecommunications, power, water and sewerage systems, as well as offices, warehouses and employee accommodation.

Shell has started a new trend to develop close integration between some selected, expert infrastructure providers and Shell's oil & gas contractors, and the EIW agreement is a part of this initiative. The steps will facilitate accelerated infrastructure delivery and greater participation from the local supply chain.

Shell's initiative emphasizes the crucial role of infrastructure works in enabling smooth and successful delivery of capital-intensive mega projects.

AECOM's unparalleled capabilities in the planning, design and integrated delivery of vital infrastructure, specifically for the oil & gas sector, remain a robust, differentiating growth driver for the company. It also has the ability to customize its range and scale of services as required for multi-national organizations, like those in energy, chemicals and extractive industries, which further fortifies its leadership position.

AECOM Price and Consensus

AECOM Price and Consensus | AECOM Quote

AECOM is currently eyeing multiple investment options in key end markets that look promising for each of its business segments. In the U.S., nine states have approved laws to enable design build in the infrastructure market, unlocking fresh opportunities for the company.

This apart, we believe solid business bonds with project developers and foreign direct investment partners are opening up multiple opportunities for AECOM in new markets. AECOM ended fiscal third-quarter 2016 with over $38 billion in backlog, which is a key indicator of future revenue growth.

However, the company has been facing headwinds in some of its end markets that can have an adverse effect on its near-term financial performance. The current volatility in the oil and gas markets, along with declining oil prices and capital spending levels, might continue to hurt the company's projects and orders.

AECOM currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader industrial products sector include Schneider Electric SE SBGSY , AO Smith Corp. AOS and EnerSys ENS , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: ACM , AOS , SBGSY , ENS

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