Atkinsrealis Group Inc T.ATRL

Recommendations from NBF

[Gabriel]

Bottom Line - We now see ATRL as providing the best risk / reward skew in our consulting coverage. The potential earnings revision dynamic available from future margin expansion (function of robust demand for Engineering services and cost management) is enticing when combined with the undemanding valuation context – more specifically, 40% discount vs. peers (Figure 1) on 2025E estimates. Nuclear also makes Atkins unique with a material runway in this space (and very high barriers to entry). With FCF potential of $450 million to $500 million, at a 3.5% yield, this points to a market capitalization of around $13.5 billion, translating to a share price of $70 to $75 by 2027 (+57% vs. current market price). We understand investors are waiting to see actual margin improvement (especially in Canada) before stepping in, but in our view, the outlook is becoming more predictable, akin to STN in 2017 when the latter exited the construction business. So, why has the stock compressed over the last several weeks? The same nuclear thematic that drove up the sentiment cooled down recently when judging by the share price performance of Cameco while Q2/24 performance, objectively, was in line on heightened expectations post the Investor Day. While we do not expect ATRL share price trajectory to be linear, we believe investors should use the current downdraft as an opportunity to buy more as execution has been improving while any capital deployment risk is a 2026 event (as it takes time to monetize 407 / source & negotiate any potential deal). The overall thematic around Nuclear, Global Infrastructure and Electrification are only supportive from a positioning perspective. We reiterate our Outperform rating and target price of $68.00 per share derived using a SOTP valuation where we assign 13.0x / 12.0x / 4.0x EV/EBITDA multiples for Engineering Services Regions / Nuclear / Linxon / on blended 2024E/2025E forecasts while ascribing no value to legacy LSTK EBITDA drag, plus $12.99 per share from 407 ($10.42) and other concessions ($2.57).

[Fuergo]

Wow Gabriel! en feu en quelques posts un excellent resumer de la situation, c est vraiment etonnant  que vous etiez en questionnement y a seulement quelques semaines et pourtant vous saviez tout ca  depuis tres longtemps, ;)