WSP Global: TRC Acquisition Catalyzes U.S. Power Growth, Synergies, and Valuation Re-Rating Supporting Buy Rating

WSP Global, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Benoit Poirier from Desjardins reiterated a Buy rating on the stock and has a C$375.00 price target.

Benoit Poirier has given his Buy rating due to a combination of factors that highlight both strategic and financial upside for WSP Global. He views the TRC acquisition as a key positive catalyst, as it removes the prior Jacobs-related equity overhang, meaningfully increases the company’s exposure to the power sector to about one-fifth of revenue, and boosts its US presence to roughly half of total sales, making WSP the largest engineering firm in the US by revenue. This transaction also helps narrow the business mix gap versus a key peer, STN, and positions WSP to benefit from strong demand in specialized power markets, including servicing all of the top 20 US utilities. In addition, Poirier underscores that management’s willingness to execute a sizeable deal in the current environment signals confidence in the company’s outlook despite broader concerns around AI-related disruptions in the industry.
From a valuation and balance sheet perspective, Poirier emphasizes that the acquisition should create meaningful shareholder value over time. He estimates roughly 8% EPS accretion by 2027 under a conservative case, with potential to reach about 11% EPS accretion if targeted revenue synergies of around C$300m are realized, supported by cross-selling opportunities and TRC’s energy-efficiency offerings. Combined cost and revenue synergies are expected to generate about C$100m in incremental EBITDA, in line with historical engineering-sector transactions when measured against the purchase price and acquired EBITDA. Despite the associated equity and debt financing, he forecasts leverage to remain within or near the company’s target range, declining to about 2.1x by the end of 2026 and 1.5x in 2027. Incorporating these impacts, Poirier raises his target price to C$375, based on a blend of earnings, EBITDA and DCF valuation methods, and concludes that the stock should close its valuation gap and regain its historical premium, supporting his Buy recommendation.

In another report released today, Scotiabank also maintained a Buy rating on the stock with a C$318.00 price target.