Baird maintained its Neutral rating on AECOM with a $65 price target, citing $1.1 billion in aggregate cash charges expected through March 2027. The stock last traded at $69.72, down 32% over the past six months.
The firm expects $600 million in charges in the current fiscal year and $500 million in the next, prior to any legal resolutions. AECOM reported fiscal third-quarter 2026 revenue of $3.59 billion, exceeding Wall Street's forecast of $2.05 billion, though adjusted earnings per share came in at negative $0.50 versus an anticipated $1.51. The company recorded a $337 million pre-tax charge related to a major construction management project.
AECOM's backlog grew to a record level, increasing by 13%, while its book-to-burn ratio stood at 1.6x. Design activity rose 6% in the Americas and returned to growth internationally. Management noted that conditions for five key projects have tracked at or above plan over the past seven weeks, with contained weather impacts and all critical labor and deliverables in place.
AECOM and Fluor are positioned as key participants in potential $5 billion Nepal reconstruction efforts following devastating floods, pending multilateral procurement timelines. Baird acknowledged underlying demand in design services, international margins, and market share gains as positive trends despite the near-term headwinds.
