Aecon Group Inc T.ARE

NA Update

[Dibah420]

National Bank Upgrades Aecon to Outperform, Lifts Target to $20.50, Says "Worst is Likely Behind"

MT Newswires - Jul 29, 2024 1:05 PM EDT

01:05 PM EDT, 07/29/2024 (MT Newswires) -- National Bank is upgrading Aecon to Outperform, from Sector Perform and lifting its target to $20.50 (from $17).

National downgraded ARE shares on March 1, 202. "Our main contention has been the persistent likelihood of write-downs since 2022 (CGL, 3 large infra projects) that ultimately resulted in multiple negative reforecasts," analyst Maxim Sytchev writes. However, with a new CFO who will assume "ownership" of cleaned up numbers, a likely revenue inflection in 2025E on the back of backlog build and a small cap rotation that ARE missed, "we believe we don't need to see many catalysts to at least get us to our $20.50 price target that still implies 30%+ upside."

Price: 16.54, Change: +0.91, Percent Change: +5.82

[Gabriel]

Continuation of NBF thoughts: Looking forward, with the new CFO having assumed “ownership” of cleaned up numbers, a likely revenue inflection in 2025E on the back of backlog visibility build and a small cap rotation that ARE missed (note that Russell 2000 trounced the S&P 500 in the last month due to expectations of lower rates – Figure 1), we believe we don’t need to see many catalysts to