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Aecom Maintains Strong Momentum Despite COVID-19 Headwinds; Raising FVE

Analyst Note

| Krzysztof Smalec, CFA |

Despite COVID-19 headwinds, Aecom maintained its strong momentum, expanding its fiscal third quarter segment adjusted operating margin by 250 basis points (calculated on net service revenue, or NSR) and growing its adjusted EBITDA 18% from the prior-year period. Management bumped the lower end of its full-year adjusted EBITDA guidance range to $720 million-$740 million (from $700 million-$740 million previously) and reiterated its full year free cash flow guidance range of $100 million-$300 million. Nothing in the earnings release fundamentally alters our thesis but we are bumping our fair value estimate to $44 from $43 due to time value of money.

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Company Profile

Business Description

AECOM is one of the largest global providers of design, engineering, construction, and management services. The firm serves a broad spectrum of end markets including infrastructure, water, transportation, and energy. Based in Los Angeles, Aecom has a presence in over 150 countries and employs 87,000. The company generated $20.2 billion in sales and $868 million in operating income in fiscal 2019.

1999 Avenue of the Stars, Suite 2600
Los Angeles, CA, 90067
T +1 213 593-8000
Sector Industrials
Industry Engineering & Construction
Most Recent Earnings Jun 30, 2020
Fiscal Year End Sep 30, 2020
Stock Type Cyclical
Employees 86,000