AECOM ACM recently announced that it has been selected by Shell Retail — a subsidiary of Royal Dutch Shell plc RDS.A — to provide ultrafast electrical vehicle (“EV”) 150kW fast chargers.
Per the deal, AECOM will deliver engineering, procurement, construction management, design and consultancy services throughout the installation process.
Notably, 200 fast chargers will be installed throughout the Netherlands under the brand name Shell Recharge. The innovative technology will charge vehicles in just 15 minutes, making them three times faster than the existing 50kW chargers. These fast chargers will be available on Shell forecourts, letting more commuters to charge their cars on the go.
Meanwhile, the initiative will lead to a lower carbon transport system in the community and encourage motorists to shift to electric mobility solutions.
AECOM has already worked with Shell Retail to build several Shell Recharge locations in the Netherlands. Its diversified business portfolio and robust prospects in all segments are gaining traction.
Diversified Business Portfolio a Boon
AECOM’s business is spread across a number of key markets that lessen operating risks. The company majorly operates in three segments namely Design and Consulting Services (DCS), Construction Services (CS) and Management Services (MS).
Notably, more than 70% of its profits are derived from infrastructure and defense markets that are poised to benefit from favorable political climate both in the United States and abroad.
In the first half of fiscal 2019, adjusted EBITDA grew 16% year over year. Moreover, it attained a record backlog of $61 billion in fiscal second-quarter 2019, up 22% from a year ago. The company’s solid backlog level indicates significant opportunities in the forthcoming quarters.
AECOM’s strong results demonstrate that the company remains on track with its five-year financial plan through fiscal 2022. Per the plan, AECOM is likely to generate more than 5% revenue CAGR, at least 9% adjusted EBITDA CAGR, 12-15% adjusted EPS CAGR and not less than $3.5 billion of cumulative free cash flow.
For fiscal 2019, it expects to record solid revenue improvement, with 12% adjusted EBITDA growth at the midpoint of the $920-$960 million guided range. Adjusted EPS is expected within $2.60-$2.90 per share versus $2.68 reported in fiscal 2018.
Share Price Performance
AECOM’s shares have gained 41%, comparing favorably with its industry’s rally of 25.5% in the year-to-date period. The company's initiatives to improve profitability and de-risk its business profile by focusing more on the fastest-growing markets having more competitive advantages are expected to drive growth.
Earnings of AECOM, which shares space in the Zacks Engineering - R and D Services industry with Quanta Services, Inc. PWR and Jacobs Engineering Group Inc. JEC, have surpassed the Zacks Consensus Estimates in each of the trailing seven quarters. Markedly, the company currently carries a Zacks Rank #3 (Hold) and has an impressive VGM Score of A, a combination that offers solid investment choice. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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