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AECOM's (ACM) JV Wins Delivery Partner Contract From Amtrak
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The joint venture (JV) led by AECOM (ACM - Free Report) with Jacobs Solutions Inc. (J - Free Report) was selected as the delivery partner by Amtrak for the Frederick Douglass Tunnel program.
ACM is optimistic about the new award win as it believes its in-house capabilities, including an integrated and digitally-enabled program management approach, will fit best in delivering efficiently against the investment.
Shares of ACM inched up 0.3% during the trading hours on Apr 8.
Program in Details
This $6 billion Frederick Douglass Tunnel program encompasses the delivery of the Frederick Douglass Tunnel, which primarily comprises two new high-capacity tubes for electrified passenger trains. The tunnel stretches through a ten-mile section of the Northeast Corridor located in Baltimore, which is America’s busiest passenger rail line. The new tunnel in discussion is set to replace the existing 150-year-old B&P Tunnel, upon which it will offer a much faster and more reliable trip to Amtrak and MARC customers in the region.
Additionally, a new roadway and railroad bridges, new rail systems and track, and a new ADA-accessible West Baltimore MARC station are also considered under the program. Currently, this transformative program is in the demolition phase, with the main construction activities slated to begin later in 2024.
The JV is expected to oversee the entire program, along with supervisory activity, including program management, design oversight, construction oversight, commissioning oversight, program controls, and commercial and capacity building.
Increasing Backlog Bodes Well
AECOM has been witnessing robust prospects in each of its segments. Currently, it has a good visibility of a strong backlog and pipelines for the upcoming quarters. Owing to the improving global scenario, which is fostering infrastructural demand around the globe, there has been an increase in demand for ACM’s services. This improving trend is reflected in the company’s backlog levels.
The company’s pipeline of opportunities is up in double digits in the Americas design business. Based on clients' strengthening funding backdrop, including benefits from the $1.2 trillion infrastructure bill in the United States, AECOM expects backlog to continue to grow. Overall, the company’s performance demonstrates that it has been outgrowing the industry organically and capturing market share.
As of the fiscal first quarter of 2024, the company’s total backlog profitability increased 9% year over year, highlighting its focus on its core business of design and profitability. Furthermore, ACM’s International segment’s backlog at the end of the same period increased 12.1% to $6.37 billion year over year, reflecting market share gains and growth visibility.
Image Source: Zacks Investment Research
Shares of this current Zacks Rank #3 (Hold) company gained 20.2% in the past year compared with the Zacks Engineering - R and D Services industry’s 42.9% growth. Although shares of the company have underperformed its industry, the ongoing contract wins are likely to boost its prospects in the forthcoming quarters.
About Jacobs Solutions
Jacobs is one of the leading providers of professional, technical and construction services to industrial, commercial and governmental clients. The company operates in four operating segments, which are Critical Mission Solutions, People & Places Solutions, its business unit Divergent Solutions and its majority investment in PA Consulting. At the first quarter of fiscal 2024 end, it reported a backlog of $29.6 billion, up 4.7% year over year. This reflects persistent solid demand for Jacobs' consulting services.
Jacobs currently carries a Zacks Rank of 3. J delivered a trailing four-quarter earnings surprise of 7.3%, on average. The Zacks Consensus Estimate for J’s fiscal 2024 sales and earnings per share (EPS) indicates growth of 5.7% and 12.1%, respectively, from the previous year’s reported levels.
Key Picks
Here are some better-ranked stocks from the Construction sector.
AWI delivered a trailing four-quarter earnings surprise of 13.1%, on average. The stock has hiked 77.6% in the past year. The Zacks Consensus Estimate for AWI’s 2024 sales and EPS indicates growth of 4.1% and 7.9%, respectively, from the prior-year levels.
Vulcan Materials Company (VMC - Free Report) currently sports a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average. The stock has surged 62.5% in the past year.
The Zacks Consensus Estimate for VMC’s 2024 sales and EPS indicates an improvement of 1.3% and 19.7%, respectively, from a year ago.
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AECOM's (ACM) JV Wins Delivery Partner Contract From Amtrak
The joint venture (JV) led by AECOM (ACM - Free Report) with Jacobs Solutions Inc. (J - Free Report) was selected as the delivery partner by Amtrak for the Frederick Douglass Tunnel program.
ACM is optimistic about the new award win as it believes its in-house capabilities, including an integrated and digitally-enabled program management approach, will fit best in delivering efficiently against the investment.
Shares of ACM inched up 0.3% during the trading hours on Apr 8.
Program in Details
This $6 billion Frederick Douglass Tunnel program encompasses the delivery of the Frederick Douglass Tunnel, which primarily comprises two new high-capacity tubes for electrified passenger trains. The tunnel stretches through a ten-mile section of the Northeast Corridor located in Baltimore, which is America’s busiest passenger rail line. The new tunnel in discussion is set to replace the existing 150-year-old B&P Tunnel, upon which it will offer a much faster and more reliable trip to Amtrak and MARC customers in the region.
Additionally, a new roadway and railroad bridges, new rail systems and track, and a new ADA-accessible West Baltimore MARC station are also considered under the program. Currently, this transformative program is in the demolition phase, with the main construction activities slated to begin later in 2024.
The JV is expected to oversee the entire program, along with supervisory activity, including program management, design oversight, construction oversight, commissioning oversight, program controls, and commercial and capacity building.
Increasing Backlog Bodes Well
AECOM has been witnessing robust prospects in each of its segments. Currently, it has a good visibility of a strong backlog and pipelines for the upcoming quarters. Owing to the improving global scenario, which is fostering infrastructural demand around the globe, there has been an increase in demand for ACM’s services. This improving trend is reflected in the company’s backlog levels.
The company’s pipeline of opportunities is up in double digits in the Americas design business. Based on clients' strengthening funding backdrop, including benefits from the $1.2 trillion infrastructure bill in the United States, AECOM expects backlog to continue to grow. Overall, the company’s performance demonstrates that it has been outgrowing the industry organically and capturing market share.
As of the fiscal first quarter of 2024, the company’s total backlog profitability increased 9% year over year, highlighting its focus on its core business of design and profitability. Furthermore, ACM’s International segment’s backlog at the end of the same period increased 12.1% to $6.37 billion year over year, reflecting market share gains and growth visibility.
Image Source: Zacks Investment Research
Shares of this current Zacks Rank #3 (Hold) company gained 20.2% in the past year compared with the Zacks Engineering - R and D Services industry’s 42.9% growth. Although shares of the company have underperformed its industry, the ongoing contract wins are likely to boost its prospects in the forthcoming quarters.
About Jacobs Solutions
Jacobs is one of the leading providers of professional, technical and construction services to industrial, commercial and governmental clients. The company operates in four operating segments, which are Critical Mission Solutions, People & Places Solutions, its business unit Divergent Solutions and its majority investment in PA Consulting. At the first quarter of fiscal 2024 end, it reported a backlog of $29.6 billion, up 4.7% year over year. This reflects persistent solid demand for Jacobs' consulting services.
Jacobs currently carries a Zacks Rank of 3. J delivered a trailing four-quarter earnings surprise of 7.3%, on average. The Zacks Consensus Estimate for J’s fiscal 2024 sales and earnings per share (EPS) indicates growth of 5.7% and 12.1%, respectively, from the previous year’s reported levels.
Key Picks
Here are some better-ranked stocks from the Construction sector.
Armstrong World Industries, Inc. (AWI - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AWI delivered a trailing four-quarter earnings surprise of 13.1%, on average. The stock has hiked 77.6% in the past year. The Zacks Consensus Estimate for AWI’s 2024 sales and EPS indicates growth of 4.1% and 7.9%, respectively, from the prior-year levels.
Vulcan Materials Company (VMC - Free Report) currently sports a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average. The stock has surged 62.5% in the past year.
The Zacks Consensus Estimate for VMC’s 2024 sales and EPS indicates an improvement of 1.3% and 19.7%, respectively, from a year ago.