ABM - ABM Industries: Good Execution Attractive Valuation Makes Me Positive On The Stock (Rating Upgrade)

2024-05-20 13:04:39 ET

Summary

• ABM Industries is executing well despite challenges in the commercial office market.
• The company's revenues grew by 3.9% Y/Y, driven by net new business and expansion in various segments, including Aviation and Technical Solutions.
• Margins were impacted by higher investments and an unfavorable project mix, but the company's margin outlook is positive, with expected improvements in the coming years.

Investment Thesis

I last covered ABM Industries Incorporated ( ABM ) in November 2023 with a neutral rating as I was concerned about the slowdown in the commercial office end market. However, the company is executing well and despite the macro headwind related to commercial office space market impacting its largest B&I segment, it was able to post Y/Y growth by outperforming the B&I end market and posting good growth in the remaining segments....

For further details see: