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Nervous markets await NvidiaThis summary was created by AI, based on 13 opinions in the last 12 months.
Aecon Group Inc (ARE-T) has seen a significant decline of nearly 40% year-to-date, providing a potential buying opportunity amidst ongoing governmental infrastructure spending, particularly in nuclear and utility-related projects. While the company experienced some earnings misses, with revenue growth at 12% and EPS doubling year over year, concerns surrounding economic conditions and a recent downgrade have emerged. However, with a solid backlog of $6.7 billion and expectations of stronger revenue in 2025, there are positive indicators for future performance. Moreover, analysts note that the stock is trading at attractive multiples compared to peers, and recent investments in Ontario's infrastructure hint at robust prospects. The overall sentiment remains cautiously optimistic as the stock's valuation appears low relative to its historical performance.
Stock's come off almost 40% YTD, a real opportunity to get in. Half of its construction projects are linked to utilities. Does a lot of nuclear construction, refurbishment, and ongoing maintenance. So the projects aren't as discretionary. Stock got ahead of itself, but then concerns about economy set in. Yield is 4.48%.
Government announcements abound with infrastructure and nuclear spending. Whether we're in a recession or not, doesn't expect governments to stop spending on transit projects and the like. Lots of opportunity for public and private spending.
EPS of 25c missed estimates of 40c; revenue of $1.26B beat estimates of $1.19B. EBITDA of $76.3M missed estimates by 8%. Revenue rose 12%. EPS doubled year over year. ARE said revenue 'will be stronger in 2025'. The stock did get a downgrade on the miss. Considering the already-low valuation, the 16% decline seems overdone, but it is that type of a 'shoot first' market. It is hardly alone in a big decline this week. Backlog is $6.7B, up $500M from the prior year. It is a small cap company with economic risk in a very bad market. It also screwed up last year with a loss on the Skyport sale. Investors are getting tired of the 'bombs' going off on a regular basis. We think in this environment buyers do not need to be in a rush to accumulate. That being said, it was a takeover target once before and this is always a possibility if the shares stay weak.
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This got away from him. He held back because these are long-lead projects and there could be labour and permit issues and delays, and their business depends on contracts, jumping from one to another, instead of a reliable stream. That said, they have a ton of projects on the books and have grown into an infrastructure giant.
ARE provides construction and infrastructure development services to private and public sector. Nuclear power certainly does seem like it is a growing part of the business, now at 19% of construction revenues over the last twelve months. Recent second quarter financials were not good, however, the stock jumped as ARE announced a 5% buyback and numerous analysts upgraded their ratings on the expectations that the "worst is likely behind." ARE does have a large backlog at $6.19 billion, and its balance sheet is net cash positive. It is still quite cheap at 15x forward earnings despite being up 89% over the last year and paying a 3.7% yield. If revenue and earnings growth begin to recover in the second half of 2024, the stock could be interesting at this valuation and yield.
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Global infrastructure building. Past projects haven't necessarily had the best margins. Right-sized all of that. Going to focus on increasing margins. Growing organically and by acquisition. Dividend has about an 8% annual compound growth rate over the last 10 years. Yield is 3.7%.
Trading at half the multiple than historically. Huge backlog with infrastructure projects, so it will continue to grow by picking up projects and by making acquisitions.
Aecon Group Inc is a Canadian stock, trading under the symbol ARE-T on the Toronto Stock Exchange (ARE-CT). It is usually referred to as TSX:ARE or ARE-T
In the last year, 12 stock analysts published opinions about ARE-T. 4 analysts recommended to BUY the stock. 4 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Aecon Group Inc.
Aecon Group Inc was recommended as a Top Pick by on . Read the latest stock experts ratings for Aecon Group Inc.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
12 stock analysts on Stockchase covered Aecon Group Inc In the last year. It is a trending stock that is worth watching.
On 2025-04-25, Aecon Group Inc (ARE-T) stock closed at a price of $15.4.
ARE seems to have a never-ending stream of issues that hurts its ability to attract investors. Legacy issues are causing losses. It has noted that 2026 will be better. But....it is quite a small company, momentum is weak, and it is still at 21X earnings. We do not think it is the type of stock to own in the current market environment and we would be comfortable sitting on the sidelines here for a while.
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