The Triumph of AECOM’s Joint Venture
The collaboration between AECOM (ACM) and Jacobs Solutions Inc. (J) has emerged victorious in the fierce battle for the delivery partner position in Amtrak’s prestigious Frederick Douglass Tunnel program. ACM exudes confidence in its proprietary capabilities, foreseeing seamless project execution through a harmonious blend of internal expertise and state-of-the-art digital program management techniques. The stock of ACM saw a modest rise of 0.3% on Apr 8 amidst the jubilation following this monumental achievement.
An Insight into the Program
The grand $6 billion Frederick Douglass Tunnel program is an architectural masterpiece in the making, set to bestow upon the transatlantic rail system a pair of cutting-edge high-capacity tubes to cater to electrified passenger trains. Nestled within the bustling ten-mile stretch of the Northeast Corridor in Baltimore, America’s paramount passenger rail line, the new tunnel is poised to supplant the ancient B&P Tunnel, promising swift, reliable voyages for Amtrak and MARC patrons in the region. Apart from the tunnel, the program encompasses the construction of new roadways, railroad bridges, rail systems, tracks, and even an ADA-accessible West Baltimore MARC station. Currently in the demolition phase, the project’s primary construction activities are slated to commence in 2024.
The JV’s mandate extends across the gamut of program supervision, encompassing program management, design oversight, construction supervision, commissioning oversight, program controls, and commercial as well as capacity-building activities.
The Ascending Backlog Prophecy
AECOM stands amid a burgeoning landscape rife with opportunities, boasting a robust backlog and an envious pipeline for the forthcoming quarters. The company basks in the glow of a strengthening global environment emboldening the infrastructural panorama, thereby stoking the demand for ACM’s distinguished services. The ascending trajectory is evidently mirrored in the company’s swelling backlog levels.
Exhibiting a double-digit surge in opportunities within the Americas design sector, ACM anticipates a sustained growth in backlog, buoyed by clients’ reinforced financial standing and the catalytic effect of the $1.2 trillion infrastructure stimulus in the United States. The company’s organic growth and market share dominance have accentuated its outperformance compared to peers within the industry. At the close of the first quarter of fiscal 2024, ACM’s total backlog profitability soared by 9% year over year, underscoring its unwavering focus on design and profitability. Meanwhile, the International segment also witnessed a substantial 12.1% uptick in its backlog, swelling to $6.37 billion, a testimony to its market penetration and growth trajectory.
Image Source: Zacks Investment Research
Despite ACM’s shares lagging behind the Engineering – R and D Services industry, the recurring spree of contract victories promises a bright outlook for the company in the impending quarters.
The Prowess of Jacobs Solutions
Jacobs stands tall as a titan among providers of professional, technical, and construction services, catering to a diverse clientele spread across industrial, commercial, and governmental arenas. The conglomerate operates through four principal segments, namely, Critical Mission Solutions, People & Places Solutions, Divergent Solutions unit, and a majority stake in PA Consulting. At the conclusion of the first quarter of fiscal 2024, Jacobs boasted a formidable backlog of $29.6 billion, marking a commendable 4.7% surge compared to the previous year, reflecting the insatiable demand for its consulting services.
Jacobs, currently holding a Zacks Rank of 3, has consistently outperformed analyst expectations, with a four-quarter earnings surprise averaging a substantial 7.3%. Forecasts indicate a promising growth trajectory for Jacobs in fiscal 2024, with an estimated 5.7% and 12.1% surge in sales and earnings per share (EPS), respectively, from the previous year’s figures.
Identifying Top Picks
For investors seeking greener pastures within the Construction sector, here are a few top picks to consider:
Armstrong World Industries, Inc. (AWI), flaunting a Zacks Rank #1 (Strong Buy), presents a compelling option for discerning investors. The stock has delivered a remarkable four-quarter earnings surprise averaging 13.1% and experienced a robust 77.6% surge over the past year. Forecasts indicate a 4.1% and 7.9% growth in AWI’s 2024 sales and EPS, respectively, from the previous year.
Vulcan Materials Company (VMC) also garners attention through its Zacks Rank of 1, having registered a noteworthy 19.5% earnings surprise over the past four quarters. The stock has observed a commendable 62.5% upsurge in the prior year. Forecasts project a 1.3% rise in VMC’s 2024 sales and an impressive 19.7% growth in EPS compared to the previous year.
Free – 5 Dividend Stocks to Fund Your Retirement
Zacks Investment Research has released a Special Report to help you prepare for retirement with 5 diverse stocks that pay whopping dividends. They cut across property management, upscale outlets, financial institutions, and a couple of strong energy producers.
5 Dividend Stocks to Include in Your Retirement Strategy is packed with unconventional wisdom and insights you won’t get from your neighborhood financial planner.
Download Now – Today It’s FREE >>
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
