WSP Global Inc T.WSP

Alternate Symbol(s): WSPOF

Industrials Conglomerates

WSP Global Inc. is a Canada-based professional services firm. The Company provides strategic advisory, engineering and design services to clients seeking sustainable solutions in the transportation, infrastructure, environment, building, energy, water and mining sectors. It also offers highly specialized services in project and program delivery and advisory services. Its segments include Canada, Americas (United States and Latin America), Europe, Middle East, India and Africa (EMEIA), and Asia Pacific, comprising Asia, Australia and New Zealand (APAC). It provides comprehensive technical support to the renewable energy industry. Its wind energy specialists help clients in both the onshore and offshore wind energy sectors develop systems. Its services include identification of prospective wind farm sites; resource assessment of wind power stations in high-wind-speed environments; wind power assessment studies and grid impact studies, and electrical interconnection studies.

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Post by retiredcfon Aug 05, 2021 1:10pm

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Post# 33655385

TD

WSP Global Inc.

(WSP-T) C$148.91

Update and Q2/21 Preview Event

WSP will report Q2/21 results on August 10 after the market close. A conference call will be held at 8:00 a.m. ET the next day (1-888-500-2848).

Impact: NEUTRAL

We forecast Q2/21 adj. EBITDA of $321.0mm vs. consensus of $324.5mm. Meanwhile, we forecast Q2/21 adjusted EPS of $1.13 – consistent with consensus.
WSP has indicated that it expects Q2/21 net revenue y/y organic growth to turn positive (follows four consecutive quarters of y/y organic declines). We forecast Q2/21 net revenue organic growth of +1.9% vs. the pandemic-challenged prior-year period (was -5.3% y/y in Q2/20 and -4.5% y/y in Q1/21), and we expect organic growth to remain positive throughout the rest of our forecast period.
As a reminder, Q2/21 will be the first quarter in which the Golder acquisition will contribute to WSP's results (transaction closed April 7). We expect Golder to contribute EBITDA of ~$44mm in Q2/21 and ~$147mm in F2021. These amounts include partial benefits from the cost synergies that WSP expects to realize (i.e., ~$35mm to be achieved over a 24-month period, with 50% to be realized within the first 12 months post-closing). WSP has also indicated that it expects to realize significant cross-selling benefits.
We have made various minor adjustments to our forecast. Our EBITDA estimates are little changed, while our EPS estimates have declined modestly (primarily driven by certain adjustments to our interest and D&A forecasts).
WSP's stock has performed well since the release of Q1/21 results on May 12 (+20% over that period). Although we acknowledge the low total return to our current target price, we continue to believe WSP's outlook remains favourable. We will revisit our target price following the release of WSP's Q2/21 results.

TD Investment Conclusion

We remain positive on WSP's outlook, supported by the company's strong backlog, diversified end-market/regional exposures, and what we see as attractive revenue growth and margin expansion potential. We are positive on the recent Golder acquisition (both strategically and financially), while further acquisitions would continue to drive growth over time for WSP, in our view.