What Happened?
Shares of facility services provider ABM Industries (NYSE: ABM) fell 3.1% in the afternoon session after the stock's negative momentum continued as the company reported weaker-than-expected fiscal fourth-quarter earnings.
The business services provider announced adjusted earnings of 88 cents per share for the quarter, missing analyst estimates that were closer to $1.09. Following the financial release, UBS downgraded ABM Industries' stock from Buy to Neutral and also lowered its price target. The downgrade reflected concerns that the company's upside could be limited by a flat margin outlook. UBS also noted that the recent acquisition of WGNSTAR was expected to initially dilute earnings and increase the company's debt load.
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What Is The Market Telling Us
ABM’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 10.4% on the news that the company reported mixed first quarter 2025 (fiscal Q2) results as its full-year EPS guidance slightly missed.
On the other hand, ABM beat analysts' organic revenue and EBITDA estimates. Market sentiment may remain cautious, especially with cash flow still under pressure as the company works through its ERP system transition. Overall, this was a softer quarter.
ABM is down 18.6% since the beginning of the year, and at $41.63 per share, it is trading 23.8% below its 52-week high of $54.64 from March 2025. Investors who bought $1,000 worth of ABM’s shares 5 years ago would now be looking at an investment worth $1,076.
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