Multiple Raised TargetsCanaccord Genuity’s Yuri Lynk raised his North American Construction Group Ltd. target to $33 from $32 with a “buy” rating, while Raymond James’ Frederic Bastien increased his target to $40 from $35 with an “outperform” rating. The average is $39.50. “We reiterate our Outperform rating on North American Construction Group and raise our target price to $40 from $35 after the amendment of a regional services contract with a major oilsands producer (which we understand to be Suncor) and management’s preliminary outlook for 2025. Our view is that this contract extension removes the biggest overhang on the stock today, providing NACG with visibility on its oil sands operations through 2028. This, combined with the continued progression of Aussie contract miner MacKellar, leaves us upbeat on the firm’s prospects heading into 2025,” said Mr. Bastien.
CIBC’s Chris Thompson upgraded North American Construction Group Ltd.to “outperformer” from “neutral” upon assuming coverage and increased the firm’s target to $38 from $30. The average is $39.60.
“We view the company as an underappreciated growth story,” he said.
“We believe the opportunity for NACG to leverage its cost discipline and supply chain management in Australia is intriguing and we expect continued expansion of the company’s bid pipeline. We believe the Canadian oil sands will remain a stable but less prominent component of the business going forward, with NACG continuing to play a key role in certain aspects of oil sands overburden removal, reclamation, and heavy construction.”
National Bank's Mr. Sytchev’s released a report introducing 2026 projections for industrial product companies in his coverage universe.
Stressing the presence of “many cross currents” in 2025, the analyst thinks the “2026 playbook is favourable” thus far.
“On the one hand, overlaying the 2016 Trump playbook would suggest a positive year ahead for us (up 26 per cent for our coverage 15 months post-presidential election first time around) as, in addition to the perception of a pro-business agenda, rates are being cut now vs. the commencement of a tightening cycle in late 2016.” he said. “The counterpoint is that valuations for our coverage are now 700 basis points to 800 basis points higher on a P/E basis vs. then (S&P 500 NTM [next 12-month] P/E is 500 bps higher). The caveat being of course 2 times higher organic growth momentum for engineers vs. pre-2019; that, plus margin expansion explain a lot of the fundamental revaluation.
“Directionally, it still means that alpha needs to come from EPS growth and accretive M&A as multiple expansion is unlikely to be a major catalyst. While we have seen a recent wobble of Federally exposed names (TTEK, ACM, BAH), IIJA funding is unlikely to be impacted given the program’s substantial appropriations to specific projects while in our coverage the maximum Federal exposure is 5-per-cent (STN). As a result, we skew towards names with the most predictable EPS trajectories, counterbalanced by reasonable valuation (as outright mispriced situations are not exactly present). A postmortem of what went right/wrong for us in 2024 ... RBA/CIGI worked; ATS did not.”
Mr. Sytchev thinks “what-ifs” for 2025 are “dominated by macro factors that, except for sticky inflation” and sees them as “generally neutral” for companies he covers “while the protectionist pivot in North America is actually a net positive given predominantly service-driven revenue generation and/or in situ production capacity in the U.S.
With that view and the introduction of his 2026 projections, Mr. Sytchev made these target changes:
North American Construction Group Ltd. ( “outperform”) to $45 from $40. Average: $39.60.