AECOM ACM stock has rallied 24.9% over the past six months, far outperforming its industry peers and broader benchmarks. While the Zacks Engineering - R and D Services industry has inched up only 0.5%, AECOM has outpaced the broader Construction sector’s 8.1% rise and the S&P 500 index’s 9.3% rally.

AECOM's 6-Month Price Performance

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Technical Trends Signal Strength for AECOM Stock

AECOM stock trades below its 50-day moving average but remains above the 200-day average. Importantly, the 50-day Simple Moving Average (SMA) continues to trend higher than the 200-day SMA, signaling sustained bullish sentiment. This positive technical setup aligns with investor confidence in AECOM’s financial health and growth outlook.
 

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Below, we explore key aspects of AECOM's recent success and discuss whether the stock is a buy, hold, or sell.

Infrastructure Demand and Global Trends

AECOM’s growth is anchored in robust demand for infrastructure development, particularly in the United States. With over 46,000 structurally deficient bridges and aging infrastructure across the nation, federally funded programs like the Infrastructure Investment and Jobs Act (IIJA) provide a stable revenue stream. Notably, 95% of IIJA funding is already secured, offering long-term visibility.

Urbanization and Energy Needs Globally

Worldwide, urbanization trends are reshaping infrastructure priorities. By 2050, nearly 70% of the global population is expected to live in urban areas, driving demand for modernized transportation, water systems, and sustainable infrastructure. AECOM is capitalizing on these trends through marquee projects like the UK’s Great Grid and Australia’s grid expansion. Additionally, the growing push for electrification and energy efficiency further broadens AECOM’s market opportunities.

Strong Project Wins and Margins

AECOM’s ability to secure large, high-value contracts gives it a distinct edge. The company boasts a win rate exceeding 50% for large pursuits, which rises for projects over $25 million. Its technical expertise and leadership in key markets, such as water design, drive these successes.

Adding to its growth story is the expansion of high-margin businesses like advisory and program management services. For instance, AECOM’s Water and Environment Advisory division is projected to grow from $200 million to $1 billion in revenues within three years, enhancing profitability.

Rising Earnings Estimates Highlight Analyst Optimism for ACM

One of the most encouraging signals for AECOM is the upward revision of its fiscal 2025 earnings per share (EPS) estimates. Over the past 60 days, analysts have raised their EPS expectations, reflecting growing optimism about the company’s ability to execute on its pipeline and deliver shareholder value, as shown in the chart below.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

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ACM Stock’s Valuation: Fairly Priced in the Industry Context

At a forward 12-month price-to-earnings (P/E) ratio of 20.44, AECOM is valued almost in line with the industry average of 20.6. This positions the stock as neither overvalued nor undervalued compared to its peers. Historically, AECOM’s P/E has ranged from 16.42 to 23.28, indicating the stock is trading within its typical valuation band, offering potential upside if its growth catalysts materialize.

The company is also trading currently at a discount compared to other industry players like Comfort Systems USA, Inc. FIX and MasTec, Inc. MTZ but at a premium to Fluor Corporation FLR. FIX, MTZ and FLR are trading with forward 12-month P/E multiples of 25.47, 25.25, and 16.94, respectively.

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Impressive Return Metrics for AECOM Stock

AECOM’s trailing 12-month return on equity stands at 25.46%, well above the industry average of 18.87%. This highlights the company’s superior efficiency in generating profits from shareholder investments compared to its peers.

Price Target Suggests Potential Upside for ACM

The company's strong position is further emphasized by its attractive Average Brokerage Recommendation (ABR). Out of 10 recommendations that contribute to the current ABR, nine analysts have rated the stock as a Strong Buy and one is a Buy. This results in an impressive ABR of 1.10 for the company. Wall Street’s average price target for the stock stands at $119.80 per share, indicating a potential 11.3% upside from the most recent closing price.

How to Play AECOM Stock Now?

With robust technical indicators, rising earnings estimates, and a stable valuation, AECOM is well-positioned for continued growth. The company’s strong fundamentals are further supported by increasing global demand for infrastructure development, competitive project wins, and the expansion of high-margin businesses.

Carrying a Zacks Rank #2 (Buy), AECOM offers an attractive investment opportunity for those seeking exposure to infrastructure and urbanization trends. Investors looking for a stock with strong upside potential should consider adding ACM to their portfolios. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Fluor Corporation (FLR) : Free Stock Analysis Report

AECOM (ACM) : Free Stock Analysis Report

Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report

MasTec, Inc. (MTZ) : Free Stock Analysis Report

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