AECOM increases long-term financial targets

AECOM (ACM) announced its strategic initiatives and increased long-term financial targets. CEO Troy Rudd said, “…today we have set new financial targets, including our raised 20%+ margin exit rate target by FY28 and our raised expectation for an adjusted EPS CAGR of 15%+ for FY26 through 2029.” AECOM has increased its long-term financial targets through FY29, including: increased the segment adjusted operating margin and adjusted EBITDA margin targets to a 20%+ exit rate by FY28, reflecting expectations for substantial increases in operating leverage; increased adjusted EPS CAGR to 15%+ to reflect NSR growth and margin expansion; expected 2020-2029 adjusted EPS CAGR is approximately double the expected median of S&P 500 companies over this same period. Expects per share dividend growth to increase in the double digits, including the 19% dividend increase announced at this date. AECOM is announcing a step change in its operating leverage opportunity, enabled by proprietary AECOM AI solutions and the expected doubling to $400M of annual NSR in its higher-margin Advisory business over the next three years. AECOM has spent several years building and executing a strategy to develop and deploy AI at scale across its markets. AECOM also announced a 19% increase to its quarterly per share dividend payment to 31c. As a result, the company has grown the per share value of its dividend by 20% annually since initiation. Maintains $645M of capacity under its existing Board repurchase authorization. AECOM has initiated a review of strategic alternatives for its Construction Management business. Beginning with Q1 results, the Construction Management business is expected to be classified as held for sale on the balance sheet and reported in discontinued operations under GAAP.