We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ABM Industries (ABM) Shows Promise with Core Business Focus
Read MoreHide Full Article
On Mar 7, Zacks Investment Research updated the research report on business services provider, ABM Industries Incorporated (ABM - Free Report) .
Headquartered in San Francisco, CA, ABM Industries provides engineering, janitorial, parking, and facility solutions to commercial, industrial, institutional, and retail facilities. The company has developed a platform to deliver an end-to-end service model to its clients by realigning its operational structure to an on-site, mobile and on-demand market based structure. This realignment has improved its long-term growth prospects and provides higher margin opportunities by enabling it to better deliver end-to-end services to its clients across urban, suburban and rural areas. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth across the industry verticals.
The company has embarked on a Vision 2020 plan that outlines its vision for the next five years. The plan hinges on three primary phases, the first of which is aimed to increase the efficiency of the company through diligent execution of the operating plan and stringent cost-reduction activities. The second phase will focus on driving growth across the realigned verticals through effective realization of the cost savings from procurement, account management and other organizational changes. The final phase of the transformation will include accelerated growth impetus from the vertical alignment and account planning systems with a continuous focus on additional cost savings. ABM Industries is currently focusing on the second phase of the plan and remains confident of achieving $40–$50 million in savings through operational efficiencies by the end of 2017.
ABM Industries has a healthy pipeline of future businesses with strength seen particularly in its government business. The company’s comprehensive, strategic and transformative initiatives are focused on driving sustainable profitability by effectively allocating resources to higher margin services and business verticals with a strong competitive edge. Management also reiterated that corporate restructuring initiatives are well on track to yield sustained long-term growth. ABM Industries has further offered bullish fiscal-2017 guidance. For the fiscal year, it expects adjusted income from continuing operations in the range of $1.80–$1.90 per share. The increased guidance is primarily due to the recognition of higher-than-expected 2020 Vision savings.
However, ABM Industries has grossly underperformed the Building Products – Maintenance Services industry with an average decline of 5.8% as against a gain of 1.2% for the latter. ABM Industries has a significant presence in the U.K. and as the European economy is highly unpredictable post the Brexit referendum, it becomes difficult for the company to increase revenues and reduce costs.
CACI International has a long-term earnings growth expectation of 10%. It has beaten earnings estimates in each of the trailing four quarters for a positive surprise of 31.89%.
Rollins has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 2.9%.
CGI Group has a long-term earnings growth expectation of 8%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ABM Industries (ABM) Shows Promise with Core Business Focus
On Mar 7, Zacks Investment Research updated the research report on business services provider, ABM Industries Incorporated (ABM - Free Report) .
Headquartered in San Francisco, CA, ABM Industries provides engineering, janitorial, parking, and facility solutions to commercial, industrial, institutional, and retail facilities. The company has developed a platform to deliver an end-to-end service model to its clients by realigning its operational structure to an on-site, mobile and on-demand market based structure. This realignment has improved its long-term growth prospects and provides higher margin opportunities by enabling it to better deliver end-to-end services to its clients across urban, suburban and rural areas. The company further expects to extend its global footprint and strengthen its position in existing markets through both inorganic and organic growth across the industry verticals.
The company has embarked on a Vision 2020 plan that outlines its vision for the next five years. The plan hinges on three primary phases, the first of which is aimed to increase the efficiency of the company through diligent execution of the operating plan and stringent cost-reduction activities. The second phase will focus on driving growth across the realigned verticals through effective realization of the cost savings from procurement, account management and other organizational changes. The final phase of the transformation will include accelerated growth impetus from the vertical alignment and account planning systems with a continuous focus on additional cost savings. ABM Industries is currently focusing on the second phase of the plan and remains confident of achieving $40–$50 million in savings through operational efficiencies by the end of 2017.
ABM Industries has a healthy pipeline of future businesses with strength seen particularly in its government business. The company’s comprehensive, strategic and transformative initiatives are focused on driving sustainable profitability by effectively allocating resources to higher margin services and business verticals with a strong competitive edge. Management also reiterated that corporate restructuring initiatives are well on track to yield sustained long-term growth. ABM Industries has further offered bullish fiscal-2017 guidance. For the fiscal year, it expects adjusted income from continuing operations in the range of $1.80–$1.90 per share. The increased guidance is primarily due to the recognition of higher-than-expected 2020 Vision savings.
However, ABM Industries has grossly underperformed the Building Products – Maintenance Services industry with an average decline of 5.8% as against a gain of 1.2% for the latter. ABM Industries has a significant presence in the U.K. and as the European economy is highly unpredictable post the Brexit referendum, it becomes difficult for the company to increase revenues and reduce costs.
Nevertheless, we remain impressed with the long-term growth potential of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the industry include CACI International Inc (CACI - Free Report) , Rollins, Inc. (ROL - Free Report) and CGI Group Inc. (GIB - Free Report) , each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CACI International has a long-term earnings growth expectation of 10%. It has beaten earnings estimates in each of the trailing four quarters for a positive surprise of 31.89%.
Rollins has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 2.9%.
CGI Group has a long-term earnings growth expectation of 8%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>