The average target price of ABM is 58 and suggests 13% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 68.0. This translates into 32% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 50.0. This is equivalent to 3% downside potential in the worst case. 

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally. The company operates through Business & Industry, Technology & Manufacturing, Education, Aviation, and Technical Solutions segments. It provides janitorial, facilities engineering, parking, custodial, landscaping and ground, and mechanical and electrical services; and vehicle maintenance and other services to rental car providers. The company was incorporated in 1985 and is based in New York, New York.

ABM Industries Incorporated

Consumer Cyclical

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. In the past 12 months, the dividend yield has been moderate and on par with its peers. On average, the company pays dividends quarterly. 

ABM reported revenue of USD 8 405mn in the last 12 months, up 3% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 68% from FY23 to USD 1.26. Market expects EPS to reach USD 3.54 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 5ppts and its growth accelerated by 10ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months it exceeded the performance of this peer group by 3ppts and accelerated its growth by 7ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 3.9% in the last 12 months, a decline from 6.2% in FY23. 

Historically, ABM has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 1.0%, down from 3.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 1.6% in the last 12 months, a decrease from 5.2% in FY23. The market analysts predict that RoA will be 4.9% in FY24, again weaker than its peers. 

ABM Industries Incorporated reported a return on equity (RoE) of 4.5% in the last 12 months, down from 14.5% in FY23. The market consensus projects an RoE of 13.9% in FY24, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 2.1%, below the peers. The consensus estimate for FY24 for RoCE is 9.7%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.1 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

ABM boasts very high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, and poor working capital management. We note low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, ABM is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, ABM is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

Considering past and projected metrics, the stock is moderately 'expensive' compared to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, overpriced on P/FCF. 

ABM Industries Incorporated

$ 51.35

4

ABM Industries Incorporated

$ 51.35

4

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 51.35

About

About

ABM Industries Incorporated

$ 51.35

4

ABM Industries Incorporated

$ 51.35

4

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 51.35

About

About

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