Our price target of $122 is based on 13.5x our FY26 adj. EBITDA estimate. Despite current volatility, we remain convinced in management’s ability to reduce cost/expand margin and de-risk ACM’s portfolio over time. We assign ACM a multiple of 13.5x, which is a modest premium over the average of its industry peers given continued execution improvement in its business, solid balance sheet, and the ongoing capital deployment. The potential for improved growth on the back of increased infrastructure spending (IIJA funding) could further drive a re-rating in the shares.

We view the following downside risks as material to the achievement of our target price: ACM’s organic growth in DCS has been relatively lumpy over recent years, and infrastructure markets could remain slower to improve than we expect given the elevated rate environment. Further, a decline in non-res markets could put pressure on ACM’s Construction Services business, which seems likely in the short-term given a slowdown in construction in major US cities. If the impact on the company from any of these factors proves to be greater or less than we anticipate, the stock will either outperform or underperform our target price.