Maxim Group analyst Tate Sullivan has maintained their neutral stance on ABM stock, giving a Hold rating on September 8.
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Tate Sullivan has given his Hold rating due to a combination of factors affecting ABM Industries. The company’s recent quarterly results showed revenue surpassing expectations, but earnings per share (EPS) fell short due to increased costs. This was attributed to higher expenses on existing contracts and reduced margins on new contracts with major U.S. manufacturing clients.
Furthermore, the forecast for the fiscal year 2025 indicates that operating EPS and adjusted EBITDA margins are expected to be at the lower end of the guidance range. Despite the company’s strategic use of free cash flow to reduce debt and potentially increase dividends and share repurchases, the competitive landscape for facility services contracts is likely to constrain margin and EPS growth. Consequently, the stock’s valuation at 12.4 times the projected FY26 EPS supports maintaining a Hold rating.
Sullivan covers the Industrials sector, focusing on stocks such as Euroseas, Graham, and Seanergy Maritime. According to TipRanks, Sullivan has an average return of -2.1% and a 45.16% success rate on recommended stocks.
In another report released on September 8, Robert W. Baird also downgraded the stock to a Hold with a $54.00 price target.