AECOM

This is our first report on AECOM, one of the largest infrastructure consulting players in the world. The company had a strong quarter and delivered an all-around beat. Its robust operational performance resulted in a 19% increase in year-over-year earnings. AECOM’s management is focusing on its investments to go after transformative growth opportunities where it has a competitive edge. This resulted in another high win rate, robust backlog momentum, and unparalleled visibility. Organic NSR growth quickened to 8%, with a 9% increase in design, which is on par with their strongest level over the past ten years and robust growth in both categories. Their expansion in the design sector in America kept speeding up. Also, AECOM was selected for the Navy-specific CLEAN program, which builds on its accomplishments with this client, including last year’s selection for the Atlantic CLEAN program. We initiate coverage on the stock of AECOM with a ‘Hold’ rating.