08:02 AM EST, 01/16/2023 (MT Newswires) -- SNC-Lavalin Group Inc. (SNC.TO) was downgraded to Neutral from Outperform at CIBC Capital Markets.
Analyst Jacob Bout maintained a price target of $30 on shares of the Montreal-based engineering company.
Bout said the downgrade is due to SNC's recent share price strength, as the stock has risen more than 20% year to date.
"We believe SNC's core Services business will be resilient in a moderate recession scenario in 2023 (70%+ exposure to public end-markets), with Nuclear set to see several new awards that could significantly add to backlog in 2023," the analyst said in a note to clients.
"That said, we have lowered our Q4/22 and H1/23 LSTK Projects estimates to reflect a heightened near-term risk of further material negative construction cost re-forecasts," Bout said. "Until the LSTK backlog is worked down or until we start to see evidence of recoveries from these projects (i.e., FCF improving), SNC will continue to trade at a significant discount to its peers."
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