Yahoo Finance AECOM (ACM) JV Becomes Unitywater Professional Services Partner
AECOM ACM announced that its joint venture (JV) with Aurecon has been selected by Unitywater to provide safe, reliable water and sewerage services in Australia.
As a Professional Services Partner, AECOM’s JV will provide its services throughout the project lifecycle by supporting strategic, long-term and detailed planning and undertaking design, technical assurance, as well as construction support throughout delivery, operationalization and handover.
With this contract, ACM will support Unitywater’s five-year and $1.8 billion capital works under the Build Better Together program. The program, which aims for regional growth and endures sustainability and net zero goals, has been designed to provide for a long-term, collaborative and efficient delivery model. The scope of this project includes sewage treatment plant upgrades and renewals, network growth and renewals for water distribution, reticulation and sewerage collection and recycled water schemes.
Unitywater provides water supply and sewage treatment services to more than 800,000 people daily across the Moreton Bay, Sunshine Coast and Noosa regions of South East Queensland. It operates and maintains more than $3.8 billion of essential service infrastructure, supplying water and sewerage services to residential and business customers, including 6,290 km of water mains, 103 water reservoirs and 17 sewage treatment plants.
Moreover, AECOM has a solid track record of securing large-scale water projects across Queensland, Australia and New Zealand.
Solid Backlog Growth Raises Hope for the Future
AECOM has been witnessing robust prospects in each of its segments. Currently, it has a good visibility of a strong backlog and pipelines for the upcoming quarters. Impressively, state and local budgets are robust and private sector clients are also investing to restore capacity and adapt to water and energy transition impacts. This apart, growth in the U.K. water market is poised to accelerate in the next five years due to the expected near doubling of AMP8 funding, where ACM has existing experience with nearly every large water utility involved.
Owing to the improving global scenario, which is fostering infrastructural demand around the globe, there has been an increase in demand for ACM’s services. This improving trend is reflected in the company’s backlog levels.
As of the end of the fiscal second quarter, the total backlog was $23.74 billion compared with $22.98 billion reported in the prior-year period. The current backlog level includes 54.8% contracted backlog growth. The design business backlog grew 6.3% to $22.29 billion. The metric was driven by a near-record win rate and continued strong end-market trends.
The company’s net service revenues or NSR — defined as revenues excluding subcontractor and other direct costs — have been benefiting from strength across core transportation, water and environment markets. NSR for the fiscal second quarter rose 8% year over year, marking the 13th consecutive quarter of accelerating organic growth.
Image Source: Zacks Investment Research
Shares of AECOM have gained 10.7% in the past year compared with the Zacks Engineering - R and D Services industry’s growth of 49.1%. Although shares of the company have underperformed the industry in the past year, 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.
Zacks Rank & Key Picks
ACM currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are:
Howmet Aerospace Inc. HWM presently carries a Zacks Rank #2 (Buy). HWM has a trailing four-quarter earnings surprise of 8.5%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for HWM’s 2024 sales and earnings per share (EPS) indicates a rise of 10.6% and 29.9%, respectively, from the prior-year levels.
Sterling Infrastructure, Inc. STRL presently carries a Zacks Rank #2. Sterling Infrastructure has a trailing four-quarter earnings surprise of 22.3%, on average.
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 11.7% and 14.8%, respectively, from the prior-year levels.
Gates Industrial Corporation plc GTES presently carries a Zacks Rank #2. GTES has a trailing four-quarter earnings surprise of 14.9%, on average.
The Zacks Consensus Estimate for GTES’ 2024 sales indicates a 0.2% decline but EPS growth of 2.9% from the prior-year levels.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AECOM (ACM) : Free Stock Analysis Report
Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report
Gates Industrial Corporation PLC (GTES) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
