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Aecom’s Management Sees Path To Double Adjusted EPS by Fiscal 2024

Analyst Note

| Krzysztof Smalec, CFA |

At its 2021 Investor Day, Aecom unveiled its long-term growth strategy and set ambitious targets for fiscal 2024, including growing adjusted EPS to over $4.30 and increasing free cash flow to over $680, which imply a more than doubling of both metrics compared with fiscal 2020 results. To reach these targets, Aecom aims to deliver mid-single-digit organic revenue growth, expand the segment adjusted operating margin calculated on a net service revenue basis to over 15% from 12.3% in fiscal 2020, and reduce the diluted average share count to roughly 120 million. After reviewing our valuation assumptions, we’ve increased our fair value estimate for Aecom to $57 from $55, which reflects slightly more optimistic margin expansion projections.

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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 $13.2 billion in sales and $629 million in adjusted operating income in fiscal 2020.

300 South Grand Avenue, 9th Floor
Los Angeles, CA, 90071
T +1 213 593-8000
Sector Industrials
Industry Engineering & Construction
Most Recent Earnings Dec 31, 2020
Fiscal Year End Sep 30, 2021
Stock Type Distressed
Employees 54,000