AECOM’s Earnings Target Hike Clashes With Analyst Downgrades

{"Forward-Looking Analysis": "Analysts expect AECOM to report Q1 2026 earnings per share (EPS) of $1.16, reflecting an 11.5% year-over-year decline, and revenue of $3.53 billion, down 12% YoY. Historical data shows AECOM has exceeded EPS estimates 88% of the time over the past two years but only 38% for revenue, indicating inconsistent top-line performance. Four downward revisions to EPS estimates and two to revenue in the last three months signal analyst caution. AECOM recently initiated a strategic review of its construction management business while raising financial targets, signaling proactive restructuring. The average 12-month price target from 13 analysts is $130.36 (28.91% upside from current $98.65), but recent downgrades from Goldman Sachs ($148→$127) and Citi ($152→$131) highlight margin pressures.", "Historical Performance Review": "In Q4 2025, AECOM reported revenue of $4.18 billion (1.58% 3M growth), net income of $137.71 million (2.88% net margin), and EPS of $0.91. Gross profit was $330.60 million. Despite trailing peers in revenue growth and ROE, AECOM’s market cap exceeds industry benchmarks.", "Additional News": "AECOM secured a multi-billion-dollar 13-year contract with Scottish Water, enhancing its infrastructure market position. Institutional investors like BI Asset Management reduced stakes by 59.8%, while the company raised its quarterly dividend to $0.31 (1.25% yield). Analysts cut price targets due to margin concerns, with RSI at 29.7 (oversold territory).", "Summary & Outlook": "AECOM faces mixed financial health: modest revenue growth (1.58% 3M) but weak profitability (2.88% net margin). Strategic reviews and the Scottish Water contract offer long-term upside, but declining EPS/revenue estimates and debt management challenges (1.3 debt-to-equity) pose risks. Analysts remain cautiously optimistic, with a 28.91% price target upside, but recent downgrades suggest near-term bearishness."}