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.