Industrials

How 4 Construction Firms Look as Biden Kicks Off Infrastructure Plan

AECOM’s fiscal 2020 revenue dipped by around 3% year over year, and the full-year net loss improved by about 30% to $186 million from a 2019 net loss of $261 million. For the 2021 fiscal year, analysts expect revenue to be about flat and earnings per share (EPS) to rise by 26% to $2.71 over adjusted 2020 EPS of $2.15

The stock’s 52-week price range is $21.76 to $62.89, and the high was posted Monday morning. Since August, AECOM’s shares have added 20%. With a consensus price target of $64.00, the shares are fully valued, and they trade at a multiple of around 23 times expected 2021 earnings. The company does not pay a dividend.

KBR

Houston-based EPC company KBR Inc. (NYSE: KBR) has a significant presence in aerospace, defense and energy projects. The company operates in two segments, Government Solutions and Technology Solutions, having folded its Energy Solutions segment into the technology portion of the business. KBR stock has added about 42% since August.

Revenue for 2020 rose just over 2%, and adjusted EPS totaled $1.73, up about 2.3% year over year. The consensus estimate for 2021 calls for EPS of $2.12, an increase of 22%, on revenue of $5.95 billion, up 3.3% year over year.

KBR stock traded at around $33.15 on Monday, in a 52-week range of $12.00 to $34.68. The consensus price target on the stock is $36.67, implying a potential upside of almost 11%, with shares trading at about 16 times expected 2021 earnings. KBR pays a $0.40 annual dividend (yield of 1.17%).

Granite Construction

Granite Construction Inc. (NYSE: GVA) operates in four construction segments: transportation, water, specialty construction and materials. The company withdrew 2020 guidance in May and only filed its second- and third-quarter earnings reports in February. Earlier this month, the company said it would not be able to file its fourth-quarter and full-year 2020 reports on time. The company expects to file its reports by the end of this month.

Even given its accounting issues, Granite’s share price has doubled since mid-August. According to the company’s February filing, third-quarter revenue was up 2.2% year over year to $2.5 billion and gross profit rose nearly 40%. Operating cash flow totaled $138.7 million, the company’s strongest total since 2006.

In August, shares traded at around $19.60. Monday morning, shares came within 20 cents of the 52-week high of $40.75, well above the consensus price target of $27.00, and even above the high price target. The stock trades at about 20 times expected 2021 EPS of $2.01.

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