ABM Industries (AB4) AI Stock Analysis

Company Guidance

ABM raised its fiscal 2026 adjusted EPS range to $3.95 to $4.10, maintained full year organic revenue growth guidance of 3% to 4% and expects to be toward the higher end of that range; Aviation, M&D, and Technical Solutions are expected to grow above that range, while B&I and education are projected to be below that range, with WGNSTAR expected to deliver approximately 1 point of additional revenue growth, bringing total growth to the high end of the 4% to 5% range. Fiscal 2026 segment operating margin is expected to be 7.7% to 7.8%, fourth quarter margin is projected to be meaningfully above the high end of that range, interest expense remains at approximately $110 million, normalized tax rates are expected to be 29% to 30%, normalized free cash flow is expected to be approximately $285 million before the impact of transformation and integration costs, Final RavenVault earnout, and any incremental restructuring, and reported free cash flow is expected to be approximately $210 million versus the prior forecast of $185 million. Fourth quarter ATS is expected to have double digit organic growth and significant sequential increases in revenue, operating profit, and margin; B&I is expected to return to organic growth around the middle of fiscal 2027, M&D is positioned to sustain strong organic growth into fiscal 2027 and beyond, education is expected to have low single digit organic growth as ABM moves into fiscal 2027, and Technical Solutions is expected to have another year of strong growth in fiscal 2027.