ARE: New Contracts And Record Backlog Will Drive Sustained Earnings Momentum

Aecon Group's average analyst price target has increased, with several analysts citing recent project wins and anticipated revenue growth as justification for raising their targets by C$4 to C$6 per share.

Analyst Commentary

Recent analyst activity around Aecon Group reveals a mix of optimism and caution, reflecting both the company's opportunities and the challenges it may face going forward. The following summarizes key analyst perspectives from the most recent research notes:

• Bullish analysts have increased their price targets for Aecon Group, citing momentum from recent project wins and positive expectations for revenue growth.
• The raised price targets, some moving from C$19 to C$24 and even up to C$30, demonstrate a higher conviction in the company's ability to execute on its pipeline and capitalize on upcoming opportunities.
• These upward revisions reflect improved confidence in Aecon’s valuation. This suggests a belief that the company is positioned to outperform prior estimates if execution remains strong.
• The combination of new contracts and a robust project backlog is viewed as a significant tailwind for future earnings growth.

• Some bearish analysts have downgraded their ratings or maintained a more neutral stance, despite raising price targets. This reflects caution around the company's ability to sustain recent performance gains.
• Downgrades to Neutral or Sector Perform suggest uncertainty about Aecon’s ability to consistently deliver on expectations, particularly given the competitive landscape and potential project risks.
• While revenue growth is anticipated, there is some concern about execution risk and whether the company can manage costs and deliver margins in line with elevated expectations.

What's in the News

• Aecon Group, Kiewit, and Black & Veatch (as Cascade Nuclear Partners) are finalizing negotiations to design and build the first four of twelve Xe-100 small modular nuclear reactors in Washington. Construction is anticipated to begin by the end of the decade (Client Announcements).
• Aecon and Pomerleau, as part of the CTCGP consortium, have secured a $609 million contract for the Port of Montreal’s Contrecoeur expansion. Preparatory and site work is commencing, with major construction set for 2026 (Client Announcements).
• Aecon Group issued financial guidance forecasting stronger revenue for 2025 and expected further growth in 2026, citing record backlog and continued demand in recurring revenue programs (Corporate Guidance, New/Confirmed).
• The company reported the completion of repurchasing 652,650 shares in July and August 2025 under its buyback program, representing 1.04% for CAD 0.01 million (Buyback Tranche Update).

Valuation Changes

• Fair Value: Remains unchanged at CA$33.09. This indicates a consistent analyst assessment of Aecon Group’s intrinsic worth.
• Discount Rate: Has risen slightly from 8.04% to 8.33%. This reflects a modest increase in perceived risk or required return by analysts.
• Revenue Growth: Remains steady at 15.92% with no change in analysts’ projections for top-line expansion.
• Net Profit Margin: Maintains a stable outlook at approximately 2.99%, indicating continued expectations for profitability levels.
• Future P/E: Declined modestly from 11.48x to 11.22x. This suggests a slight decrease in the price investors are willing to pay for forecasted earnings.