ATS Corp T.ATS

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RBC’s Sabahat Khan cut his ATS Corp. target to $54 from $55 with an “outperform” rating. The average is $57.33.

“ATS hosted investor site tours across Munich, Bologna, and Parma, highlighting its capabilities across Life Sciences and Food & Beverage,” he said. “We heard from a number of senior leaders (CEO, CFO, segment/division leads) as they outlined the opportunity set and discussed the company’s strategy, market positioning, and ATS’s offerings across these two significant business lines.”

“ATS shares have pulled back in recent quarters given the tougher comparables and some headwinds in the Transportation (EV) market, which has led to investor questions regarding the potential cyclicality of the overall business. The investor event and management commentary at our recent Global Industrials Conference highlighted that the company is trending toward its historical revenue mix, where 75 per cent of the business is relatively stable through the cycle (Life Sciences + F&B + energy). Implicit in this commentary is that the Transportation/EV mix is trending toward high single digits to low double digits percentage of revenue. Our forecasts for yearend F25 (March 2025) reflect Life Sciences at 50 per cent of full-year revenue. Recall that management recently announced plans to reallocate resources from Transportation to other business lines (while also undertaking a cost/ headcount reduction within this business). Overall, we expect ATS shares to trend higher as the macro environment stabilizes and as ATS’s revenue mix reverts toward its historical ‘staples-like’ exposure.”