Raymond James Calling it “the machine manufacturing machine,” Raymond James’ Michael Glen initiated coverage of ATS Corp. with an “outperform” rating and $53 target. The average is $56.83.
“We acknowledge in that ATS is being valued with a growth multiple, and the company is on track to deliver an EPS CAGR of 25 per cent over the past 5 years (F2019-F2023E),” he said. “From that perspective, while we anticipate generally positive organic growth across each business line, we believe that the multiple is also embedding an expectation for incremental M&A. In terms of EBITDA, we use a forward multiple of 11.5 times F2025E EBITDA which is in line with its 5-year average, and sits at a discount to the U.S. peer group. In terms of P/E, we are using a target multiple of 20x our F2025E EPS, which is in-line with the 5-year historical multiple and also in line with U.S. peers. We believe further multiple expansion will be driven by execution towards the target operating margin of 15 per cent, ATS securing additional bookings in the fast growing battery module vertical, and/or additional bookings associated with the reshoring/onshoring manufacturing theme.”