AECOM ACM has secured the program management services deal from the San Diego County Regional Airport Authority (Authority).
Per the deal, ACM will manage the $3.8 billion New Terminal 1 (NT1) program and modernize Terminal 2 East (T2E) at the San Diego International Airport (SAN). The scope of work includes a full range of program, project and construction management services and diversified specialized services.
NT1, the airport’s largest project to date, will feature a new on-site entrance road designed to offer travelers a quicker route to the airport. Additionally, new bike lanes and a pedestrian pathway will link the airport with nearby communities. NT1 also reserves space outside the terminals for a potential future connection to the region’s public transit system.
ACM has served the Authority for nearly two decades. Some of the major capital development projects at SAN include the "Green Build," a 494,000-square-foot, three-story expansion of Terminal 2 West (T2W); a new Federal Inspection Services facility to support increasing international flights; a consolidated rental car center; and a new parking plaza for T2E/W.
ACM’s Backlog Growth Raises Hope for the Future
AECOM has been experiencing strong growth across all its segments, with a solid backlog and robust pipeline visibility for upcoming quarters. Both state and local budgets are healthy, and private sector clients are making investments to restore capacity and adapt to water and energy transitions. Additionally, growth in the U.K. water market is expected to accelerate over the next five years, driven by an anticipated near doubling of AMP8 funding. In this area, ACM has substantial experience with most major water utilities involved.
The global infrastructure demand has been increasing, contributing to a rise in demand for ACM's services. This positive trend is reflected in the company's backlog, which stood at $23.74 billion at the fiscal second-quarter end, up from $22.98 billion in the prior-year period. Of this, 54.8% represents contracted backlog growth, with the design business backlog increasing 6.3% to $22.29 billion, driven by a near-record win rate and strong end-market performance.
The company’s net service revenues (NSR) — which exclude subcontractor and other direct costs — have benefited from the strength in core sectors like transportation, water, and the environment. NSR for the fiscal second quarter increased 8% year over year, marking the 13th consecutive quarter of accelerating organic growth.
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Shares of AECOM have gained 10.4% in the past three months compared with the Zacks Engineering - R and D Services industry’s growth of 6%. The ongoing contract wins are likely to boost its prospects in the forthcoming quarters. Also, increasing infrastructural spending trends across the world are encouraging for ACM.
ACM’s Zacks Rank & Key Picks
ACM currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same space are:
Howmet Aerospace Inc. HWM presently sports a Zacks Rank #1 (Strong Buy). HWM has a trailing four-quarter earnings surprise of 10.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HWM’s 2024 sales and earnings per share (EPS) indicates a rise of 12.6% and 40.8%, respectively, from the prior-year levels.
Sterling Infrastructure, Inc. STRL presently carries a Zacks Rank #2 (Buy). Sterling Infrastructure has a trailing four-quarter earnings surprise of 17.4%, on average.
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 9.7% and 26.6%, respectively, from the prior-year levels.
M-tron Industries, Inc. MPTI currently carries a Zacks Rank #2. It has topped earnings estimates in three of the trailing four quarters and missed once, with an average surprise of 9.2%.
The Zacks Consensus Estimate for MPTI’s 2024 sales and EPS indicates a rise of 16.1% and 76.6%, respectively, from prior-year levels.
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