Aecom (NYSE:ACM) shares are trading up Friday, after gaining around 5% during the week.

The company "high-graded its portfolio" by increasingly focusing on larger and more complex design projects, where it has the greatest competitive advantage, and is moving further towards program management and advisory, according to Goldman Sachs.

Analyst Adam Bubes initiated coverage of Aecom with a Buy rating and price target of $130.

The Aecom Thesis: Engineering News-Record's market data shows that the company has industry-leading design market share in its largest end markets, Bubes said in the initiation note.

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Bubes noted that Aecom secured the second-highest position in program management, increasing its market share from 6.6% of the top 50 program managers since 2021 to around 11% today.

"We forecast a 6% total company organic growth CAGR through 2027 driven by AECOM's accelerating win rates, double-digit program management and advisory growth, and solid underlying end market trends," the analyst wrote.

Since 2020, Aecom has "divested its self-perform at-risk construction businesses, exited low return countries, and shifted resources to larger and more complex projects," Bubes said. The company's high-graded portfolio is now "driving higher returns at lower risk," he added.

ACM Price Action: Shares of Aecom were up 2.62% at $115.51 at the time of publication on Friday.

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