Analyst John Gibson CFA of BMO Capital reiterated a Buy rating on North American Construction Group, retaining the price target of C$27.00.
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John Gibson CFA has given his Buy rating due to a combination of factors that highlight the potential of North American Construction Group (NOA) despite recent challenges. The company faced softer Q2/25 results with delays in the oil sands and reduced guidance due to cost challenges impacting margins. However, the valuation remains attractive, and the company’s operations in Australia continue to show strength, contributing to a positive outlook.
NOA’s heavy equipment revenue in both North America and Australia has shown significant year-over-year growth, with Australia experiencing a 14% increase despite some weather-related setbacks. The company’s record backlog and recent contract extensions in Australia suggest potential upside in future performance. The stability offered by its core oil sands operations, combined with growth opportunities in metals, mining, and other construction projects, supports the Buy rating. The target price remains at $27, reflecting a favorable valuation metric of 3.7x 2026E EV/EBITDA.