Engineering & Construction "Reducing price targets for Engineering..."

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Engineering & Construction "Reducing price targets for Engineering..."

Global Research

2 July 2026ab

Engineering & Construction Equities

AmericasReducing price targets for Engineering

companies ACM, J, WSP Heavy Machinery

Steven Fisher, CFA

Analyst

steven.fisher@ubs.com

Acknowledging the AI disruption overhang in our 12-month price targets +1-212-713 8634

We are reducing our price targets for engineering companies AECOM, Jacobs, and WSP. Avinatan Jaroslawicz

For all three stocks, we lower the multiples and leave estimates ~unchanged. Analyst

avinatan.jaroslawicz@ubs.com

While we don't expect material earnings impacts from AI in the near/medium

+1-212-713 1405

term, we see it as increasingly unlikely that multiples will recover to the extent we

previously expected in the next 12 months. As such, we are reducing our 12- Judah Aronovitz

month price targets for the group. Associate Analyst

judah.aronovitz@ubs.com

Implicitly, the lower multiples reflect the increased risk associated with long-term +1-212-713-4881

growth rates. We continue to recommend the stocks because we believe the Lauren Sullivan

market is overly reducing the implied long-term growth rates for now. However, Associate Analyst

we believe it will be hard to disprove in the next 12 months, and therefore reduce lauren.sullivan@ubs.com

the multiple in our valuations. +1-212-713 8230

Our view: We remain Buy rated on all three stocks, based on strong organic

growth prospects (more so in privately funded markets, including data centers,

power, and manufacturing, but the public sector as well), margin expansion

potential, and upside from capital allocation. Over time, we think there could be

some top-line erosion on cost reimbursable work, but this could be offset by share