Aecon Group (TSX:ARE): Valuation Insights After Securing $609M Port of Montreal Expansion Contract

Aecon Group (TSX:ARE) has attracted attention after announcing, together with Pomerleau, completion of the financial close and contract award for the $609 million Port of Montreal Expansion project. Preparatory work will begin soon, adding to Aecon’s construction backlog.

See our latest analysis for Aecon Group.

The Montreal port milestone arrives amid a sharp turnaround in Aecon's stock, with a 22.6% share price return over the past 90 days driving renewed momentum, even as the year-to-date price is still down. Looking further out, total shareholder return stands at 12.4% over the past year and an impressive 199% over three years. This highlights Aecon’s rebound potential as confidence grows around its growth pipeline and project wins.

If you’re curious what other construction and infrastructure names might be seeing similar momentum, now is the perfect time to broaden your search and discover fast growing stocks with high insider ownership

With Aecon’s shares climbing recently but still rebounding from earlier declines, investors are left to wonder whether the market is overlooking deeper value in Aecon or if the stock has already factored in its path for future growth.

Most Popular Narrative: 20% Undervalued

Aecon Group’s last close was CA$24.78, which is 20% below the most widely followed narrative’s fair value estimate of CA$24.82. This highlights meaningful upside potential if the projected dynamics play out. This sets up a key debate over what’s driving the valuation and where the market might be getting it wrong.

Accelerating investment in energy transition and decarbonization infrastructure (such as grid-scale energy storage, nuclear refurbishment, and electrification projects) is driving robust demand for Aecon's core capabilities. This is supported by record backlog and multi-year project pipelines, positively impacting revenue growth and order book visibility. Increased public spending on infrastructure, driven by urbanization, population growth, and the need to upgrade aging assets in Canada and the U.S., is expanding Aecon's addressable markets. This supports sustained growth in top-line revenue and reduces reliance on one-off projects.

Read the complete narrative.

Want to know what’s fueling this punchy price target? The narrative relies on bold revenue and margin expansion assumptions, plus a future earnings multiple rarely seen in this sector. If you’re curious which aggressive growth levers tip the fair value so high, you have to read the full breakdown. These surprising numbers could change how you see Aecon’s future.

Result: Fair Value of $24.82 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still risks. Persistent margin pressures or unexpected project delays could make Aecon’s rebound story harder to sustain.

Find out about the key risks to this Aecon Group narrative.

Build Your Own Aecon Group Narrative

If you see things differently or want a hands-on look at Aecon’s numbers, you can analyze the data yourself and build your own narrative in just a few minutes. Do it your way.

A great starting point for your Aecon Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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