Engineering & Construction

Visible order and backlog growth among important civil infrastructure and global defense markets combined with an expected release of projects as the capital starvation cycle ends and animal spirits emerge among energy / commodity producers should allow global E&C service firms an ability to generate organic growth, increased free cash flow and better returns for shareholders. The longer-cycle nature of client capital investment plans should allow relative revenue visibility for E&C companies through 2020, lifting off 2016-17 trough levels. We expect civil infrastructure, federal government services, general industrial, life sciences and commercial/specialized buildings to contribute. In addition, encouraging front end engineering design (FEED) and technology sales activities should send positive backlog signals for new or re-engineered energy and downstream chemical projects for 2018-19 as client confidence improves.

Top Picks:

  • Fluor Corp. (FLR)
  • Aecom (ACM)

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Michael S. Dudas