RBC Stays Bullish on Aecom (ACM) While Baird Flags Long-Term Revenue Pressure From AI Rollout

Aecom (NYSE:ACM) is one of the best industrial stocks to buy according to Wall Street analysts. Aecom (NYSE:ACM) holds a Strong Buy consensus rating from 11 analysts with a $144.50 target, implying 41% upside from its current share price of $102.50.

Analysts at RBC Capital reiterated their outperform rating for Aecom on November 24 and raised the price target to $139. The stance follows company’s Chief Financial & Operations Officer, Gaurav Kapoor, and SVP of Corporate Finance & Treasurer, Will Gabrielski, reiterating that artificial intelligence represents an opportunity rather than a threat to the business.

The management team expects AI to enhance engineering expertise, client relationships, and internal data management. The technology is expected to supplement the company’s proprietary mathematical models, for which it owns both the code and the data. An analyst at Baird has echoed similar sentiments, reiterating that Aecom’s AI strategy is ahead of its peers and supports the company’s margin targets through 2029.

On November 21, Baird downgraded AECOM Technology from Outperform to Neutral while keeping its $143 price target, noting the company’s advanced AI strategy positions it ahead of peers and supports near-term growth, reflected in its low PEG ratio of 0.51. While confident in AECOM’s ability to reach 20% margin targets, Baird cautioned that AI implementation could pressure revenue toward the end of its 2029 plan. The firm added that although AECOM’s end-market exposure may be less attractive than rival Jacobs, its AI applications are more relevant and should drive EPS growth. The downgrade, Baird emphasized, reflects valuation concerns rather than doubts about earnings potential.

Aecom (NYSE:ACM) is a global infrastructure consulting firm that provides professional services, including planning, design, engineering, program, and construction management, for complex projects in transportation, buildings, water, energy, and the environment, helping clients from governments and businesses build sustainable legacies.

While we acknowledge the potential of ACM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 12 Best 52-Week High Stocks to Buy Right Now and 10 Best Cybersecurity Stocks to Buy Under $50.

Disclosure: None. This article is originally published at Insider Monkey.