AECOM ACM was selected by the U.K. Government Commercial Agency for the Construction Professional Services 2 (CPS2) Framework, strengthening its access to public-sector infrastructure opportunities across the United Kingdom.
The four-year framework, valued at $4.7 billion, CPS2 will serve as a key procurement route for U.K. public-sector organizations seeking construction professional and technical services across education, housing, energy, health and other areas.
This marks AECOM’s second appointment to the framework, following its original inclusion in 2021. Under CPS2, the company has expanded its role from five lots to nine, covering general infrastructure, project management, defense, defense enhanced, international, nuclear energy and all three flood risk and asset management lots. Following the news, shares of ACM dropped 1.4% during trading hours yesterday.
AECOM Is Deepening Public-Sector Partnerships
AECOM’s broader appointment enhances its exposure to high-value U.K. infrastructure work, including defense, nuclear energy, flood risk management, social infrastructure, transportation and environmental services. It also reinforces the company’s position as a trusted partner to government clients, including central government departments, local authorities and the Environment Agency.
Management noted that CPS2 provides an important route to market for AECOM’s multidisciplinary services and supports its ability to help address the U.K. public sector’s infrastructure and built-environment challenges while delivering long-term value for taxpayers.
ACM’s Backlog Strength Supports Growth Outlook
AECOM’s record backlog and expanding pipeline continue to support its long-term growth trajectory. Demand remains solid across transportation, energy, water, defense and data center infrastructure. Management also highlighted a roughly 50% increase in its defense pipeline, along with continued opportunities tied to hyperscale data centers, power generation and transmission projects.
The company ended the second quarter of fiscal 2026 with backlog up 8% year over year to a record $26.2 billion, supported by a design book-to-burn ratio of 1.2x. Net Service Revenue (NSR) margins, adjusted EBITDA and adjusted EPS reached second-quarter highs, while segment adjusted operating margin expanded 50 basis points to 16.5%. Backed by a strong backlog, robust funding across core markets and continued execution of strategic initiatives, management raised full-year fiscal 2026 profit guidance for the second time this year and expects adjusted EPS and EBITDA to increase 14% and 7% compared to fiscal 2025, respectively, at the midpoints of its updated guidance ranges.
AECOM stock has declined 28.8% in the year-to-date period, significantly underperforming the Zacks Engineering - R and D Services industry’s 39.1% growth. The near-term outlook remains challenged by macroeconomic uncertainty, inflationary pressures and temporary disruptions related to the prolonged U.S. federal government shutdown.
However, ACM’s long-term growth outlook remains compelling, supported by strong demand across its core end markets, including transportation, water, environmental services, energy and advanced facilities.
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ACM’s Zacks Rank & Key Picks
AECOM currently carries a Zacks Rank #3 (Hold).
Here are some top-ranked stocks from the Construction sector:
Comfort Systems USA, Inc. FIX flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 39.3%, on average. FIX stock has surged 121.4% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Comfort Systems’ fiscal 2026 sales and earnings per share (EPS) indicates growth of 30.5% and 49.2%, respectively, from the prior-year levels.
Sterling Infrastructure, Inc. STRL flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. STRL stock has jumped 204.6% year to date.
The Zacks Consensus Estimate for Sterling’s 2026 sales and EPS indicates growth of 59.2% and 77.5%, respectively, from the prior-year levels.
Quanta Services, Inc. PWR flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 10.3%, on average. PWR stock has climbed 75.4% year to date.
The Zacks Consensus Estimate for Quanta’s 2026 sales and EPS indicates growth of 21.5% and 30%, respectively, from the prior-year levels.
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This article originally published on Zacks Investment Research (zacks.com).
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