CA$26.36: That's What Analysts Think Aecon Group Inc. (TSE:ARE) Is Worth After Its Latest Results

Shareholders in Aecon Group Inc. (TSE:ARE) had a terrible week, as shares crashed 20% to CA$17.96 in the week since its latest full-year results. Revenues came in at CA$4.2b, in line with expectations, while statutory losses per share were substantially higher than expected, at CA$0.95 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Aecon Group

Taking into account the latest results, the most recent consensus for Aecon Group from eleven analysts is for revenues of CA$4.61b in 2025. If met, it would imply a solid 8.7% increase on its revenue over the past 12 months. Earnings are expected to improve, with Aecon Group forecast to report a statutory profit of CA$1.06 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$4.59b and earnings per share (EPS) of CA$1.51 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The average price target fell 14% to CA$26.36, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Aecon Group at CA$33.00 per share, while the most bearish prices it at CA$19.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Aecon Group shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Aecon Group's rate of growth is expected to accelerate meaningfully, with the forecast 8.7% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 5.5% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Aecon Group to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Aecon Group. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Aecon Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Aecon Group going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Aecon Group that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.