Struggling Office Market Can Curb ABM's B&I Segment Growth: Analyst
Portfolio Pulse from Lekha Gupta
Truist Securities analyst Jasper Bibb initiated coverage on ABM Industries Inc with a Hold rating and a price target of $43. Concerns about ABM's office exposure, which accounts for approximately 40% of revenue, may hinder growth in the B&I segment. The analyst is cautious about the office market's impact on FY25 estimates and sees a protracted downturn as a risk. Despite this, ABM's adjusted EBITDA margins have improved, and the company trades at a 12% FCF yield based on CY24E adjusted FCF per share estimates. ABM's Q3 FY23 revenue exceeded consensus, but adjusted EPS fell short.
November 13, 2023 | 6:46 pm
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Truist Securities analyst Jasper Bibb initiated coverage on ABM Industries with a Hold rating and a $43 price target, expressing concerns over the company's office market exposure and its potential impact on future earnings.
The analyst's initiation of coverage with a Hold rating and concerns about the office market's impact on ABM's B&I segment growth could lead to cautious investor sentiment in the short term. However, the company's improved margins and compelling FCF yield may balance out the negative aspects, leading to a neutral score.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100