Will This Analyst Action Help Aecom (ACM) Stock Today?

NEW YORK (TheStreet) -- Bank of America/Merrill Lynch added Aecom  (ACM) to its US 1 List and set a $46 price target. The firm said the company's URS  (URS) acquisition should help drive attractive free cash flow growth.

The stock closed at $34.90 on Monday.

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Separately, TheStreet Ratings team rates AECOM TECHNOLOGY CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AECOM TECHNOLOGY CORP (ACM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels.
  • AECOM TECHNOLOGY CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AECOM TECHNOLOGY CORP turned its bottom line around by earning $2.36 versus -$0.57 in the prior year. This year, the market expects an improvement in earnings ($2.52 versus $2.36).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.1%. Since the same quarter one year prior, revenues slightly dropped by 4.8%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • You can view the full analysis from the report here: ACM Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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