AECOM Wins Contract to Support LA Metro's ZEB Transition

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AECOM ACM won a contract from the Los Angeles County Metropolitan Transportation Authority (Metro) to provide program management, design and engineering services.

Banking on its Sustainable Legacies strategy, ACM will support Metro’s ambitious goal of transitioning its bus fleet to Zero Emission Buses. Also, it will focus on charging infrastructure conceptual design, specification, and procurement. Its expertise will help guide the seamless transition to zero-emission operations, offering innovative solutions to complex transportation challenges.

The sustainable and efficient transit system aims to reduce greenhouse gas emissions while improving air quality for Los Angeles County residents. On an impressive note, the initiative is one of the largest electric bus programs in the United States and is supported by the Infrastructure Investment and Jobs Act.

ACM’s Stock Performance

The company’s shares have gained 11.6% so far this year, which is nearly one-third of the Zacks Engineering - R and D Services industry’s 36.2% growth.

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Zacks Investment Research


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This Zacks Rank #4 (Sell) company has been ailing from labor shortages, particularly in skilled trades. Inflationary pressures, particularly in raw materials and energy, could also be bothering margins. This apart, broader economic uncertainties, such as fears of a recession or global economic slowdown, might be impacting the infrastructure sector. Investors could be cautious about long-term infrastructure spending, especially if government funding slows down.

ACM's Strong Backlog & Global Demand Drive Raises Hope

Mitigating the above-mentioned headwinds, AECOM has been experiencing robust growth across all its segments, backed by strong pipeline visibility for the upcoming quarters. Healthy state and local budgets, along with increased private sector investments in water and energy transitions, have contributed to this upward trend.

Additionally, the U.K. water market is expected to see accelerated growth over the next five years, driven by a near doubling of AMP8 funding. AECOM’s deep expertise with major water utilities positions it well to benefit from this expansion.

Global demand for infrastructure development is rising, further increasing the need for AECOM’s services. As of the fiscal third-quarter end, the total backlog was $23.36 billion compared with $23.21 billion reported in the prior-year period. The current backlog level includes 54.8% contracted backlog growth.

Ongoing contract wins are expected to boost prospects. Global infrastructure spending trends remain strong, providing further opportunities for AECOM’s continued expansion.