https://www.lesaffaires.com/bourse/analyses-de-titres/a-surveiller-groupe-tmx-aecon-et-harley-davidson/642499/2
Aecon (ARE, $10.97): pre-existing contract problems only temporary, says Desjardins analyst.
Last week, the builder and provider of integrated services in the infrastructure sector released its Q2 results, which were marked by higher-than-expected charges related to pre-existing contracts.
Investor confidence has been somewhat shaken by this, and given management's difficulty in forecasting potential losses, Desjardins Securities analyst Benoit Poirier prefers to take a cautious approach, reducing his estimates for earnings before interest, taxes, depreciation and amortization (EBITDA) and free cash flow.
The analyst now forecasts EBITDA of $73.7 million in Q3, $51.9 million in Q4 and $230.8 million for the full year 2024, including fixed charges of $15 million, $40 million and $60 million for each period respectively.
Despite the absence of positive cash flow for some time, management does not seem to be concerned about its ability to pay dividends, given that it has always managed to do so during the various cycles it has had to go through.
For his part, Benoit Poirier sees the current weakness as offering an interesting entry point for long-term investors, as he sees these as temporary problems.The company's core sectors continue to perform well, and the order book is at record levels, he notes. He maintains his Buy recommendation, but reduces his price target from $19 to $16.