ATCO Ltd Cl I NV (TSE:ACO.X)
TSX:ACO.X
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ATCO Ltd Cl I NV
(TSX:ACO.X)
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Rating:59Neutral
Price Target:
C$71.00
▲(4.64% Upside)
Action:Reiterated
Date:05/09/26
The score is primarily held back by weaker net profitability and elevated leverage despite strong operating cash generation and improved revenue growth. Technicals are neutral-to-slightly positive, and valuation is reasonable with a moderate P/E and ~3% dividend yield, supporting a mid-range overall score.
Positive Factors
Operating Cash Flow
Consistent operating cash flow (~$1.9B TTM) and a return to positive free cash flow ($264M TTM) indicate durable cash-generation capacity. This supports interest and debt servicing, funds reinvestment or dividends, and provides flexibility for capex or strategic spending over the next several quarters.
Negative Factors
Compressed Net Margin
Net margins have declined sharply to ~3.1% TTM from ~9% historically, materially reducing profitability after non-operating items. Persistently lower net income constrains retained earnings, limits distributable cash to shareholders, and raises the bar for management to deliver sustainable earnings improvement.
Read all positive and negative factors
Positive Factors
Negative Factors
Operating Cash Flow
Consistent operating cash flow (~$1.9B TTM) and a return to positive free cash flow ($264M TTM) indicate durable cash-generation capacity. This supports interest and debt servicing, funds reinvestment or dividends, and provides flexibility for capex or strategic spending over the next several quarters.
Read all positive factors
ATCO Ltd Cl I NV (ACO.X) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$6.97B
Dividend Yield3.62%
Average Volume (3M)263.19K
Price to Earnings (P/E)12.6
Beta (1Y)0.13
Revenue Growth2.57%
EPS Growth-63.07%
CountryCA
Employees20,582
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)1.41
Shares Outstanding100,863,235
10 Day Avg. Volume230,780
30 Day Avg. Volume263,185
Financial Highlights & Ratios
PEG Ratio-0.65
Price to Book (P/B)1.40
Price to Sales (P/S)1.23
P/FCF Ratio27.89
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$72.80Price Target Upside7.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)4.8
Revenue Forecast (FY)C$5.73B
ATCO Ltd Cl I NV Business Overview & Revenue Model
Company Description
ATCO Ltd., together with its subsidiaries, provides housing, logistics and transportation, agriculture, water, real estate, and energy and energy infrastructure solutions in Canada, Australia, and internationally. The company offers workforce and ...
How the Company Makes Money
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ATCO Ltd Cl I NV Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The earnings call highlights significant growth in adjusted earnings and cash flow, along with strong performances in key business segments like ATCO Structures and Neltume Ports. However, challenges such as the reset in ROE for Alberta utilities and perceived undervaluation of ATCO Structures suggest some areas of concern. The sentiment is cautiously optimistic, with a focus on continued strategic execution.Positive Updates
Adjusted Earnings Growth
ATCO achieved adjusted earnings of $101 million or $0.90 per share in Q2 2025, up $5 million compared to the same period in 2024.
Negative Updates
Alberta Utilities ROE Reset
Growth in ATCO's Canadian Utilities was offset by the reset in the allowable ROE at Alberta utilities and the conclusion of the efficiency carryover mechanism.
Read all updates
Q2-2025 Updates
Positive
Negative
Adjusted Earnings Growth
ATCO achieved adjusted earnings of $101 million or $0.90 per share in Q2 2025, up $5 million compared to the same period in 2024.
Read all positive updates
Company Guidance
In the second quarter of 2025, ATCO Limited reported adjusted earnings of $101 million or $0.90 per share, marking an increase of $5 million compared to the same period in 2024. This growth was primarily driven by an increase in the rate base and higher rates in their Canadian Utilities investment, alongside a new 5-year access arrangement for ATCO Gas Australia. Despite some challenges such as a reset in the allowable ROE for Alberta utilities, ATCO Structures also performed well, with adjusted earnings rising to $32 million and an adjusted EBITDA of $70 million, putting them on track to surpass the previous year's annual EBITDA. Investment in Neltume Ports also contributed to earnings growth, with a $1 million increase compared to Q2 2024. The company reported a notable increase in cash flow from operating activities, reaching $192 million year-to-date, which allowed for higher capital expenditures totaling $117 million. This financial strength supports ATCO's strategic investments and expansions, including a new manufacturing facility in Australia to bolster their modular construction activities.ATCO Ltd Cl I NV Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
45
Neutral
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.16B | 5.14B | 4.94B | 4.74B | 4.98B | 4.29B |
| Gross Profit | 1.64B | 1.34B | 3.11B | 3.03B | 3.12B | 2.72B |
| EBITDA | 2.10B | 2.04B | 1.94B | 1.95B | 2.03B | 1.62B |
| Net Income | 158.00M | 150.00M | 430.00M | 432.00M | 370.00M | 246.00M |
Balance Sheet | ||||||
| Total Assets | 27.73B | 27.67B | 26.72B | 25.36B | 24.14B | 23.00B |
| Cash, Cash Equivalents and Short-Term Investments | 1.08B | 1.36B | 713.00M | 592.00M | 1.03B | 1.09B |
| Total Debt | 13.01B | 13.38B | 11.98B | 11.17B | 10.20B | 10.15B |
| Total Liabilities | 19.19B | 19.32B | 18.01B | 16.86B | 15.79B | 15.05B |
| Stockholders Equity | 4.64B | 4.52B | 4.63B | 4.42B | 4.38B | 4.11B |
Cash Flow | ||||||
| Free Cash Flow | 264.00M | 227.00M | -27.00M | 57.00M | 535.00M | 263.00M |
| Operating Cash Flow | 1.90B | 1.93B | 1.66B | 1.48B | 1.97B | 1.46B |
| Investing Cash Flow | -1.92B | -1.90B | -1.80B | -2.58B | -1.50B | -1.38B |
| Financing Cash Flow | 569.00M | 846.00M | -55.00M | 362.00M | -527.00M | -85.00M |
ATCO Ltd Cl I NV Technical Analysis
Neutral
67.85
Price Trends
65.69
Positive
60.72
Positive
55.45
Positive
Market Momentum
1.01
Positive
50.22
Neutral
15.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACO.X, the sentiment is Neutral. The current price of 67.85 is below the 20-day moving average (MA) of 68.37, above the 50-day MA of 65.69, and above the 200-day MA of 55.45, indicating a neutral trend. The MACD of 1.01 indicates Positive momentum. The RSI at 50.22 is Neutral, neither overbought nor oversold. The STOCH value of 15.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ACO.X.
ATCO Ltd Cl I NV Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | C$13.14B | 14.84 | 1.59% | 4.33% | -1.26% | -92.43% | |
59 Neutral | C$6.97B | 12.59 | 3.39% | 3.62% | 2.57% | -63.07% | |
58 Neutral | C$9.98B | 171.62 | 0.49% | 4.44% | 29.58% | -101.22% | |
53 Neutral | C$6.10B | 13.89 | 3.63% | 4.32% | 1.84% | ― | |
51 Neutral | C$5.23B | 104.46 | -11.56% | 1.46% | -16.72% | -125033.33% | |
47 Neutral | C$7.26B | -11.93 | 57.41% | 4.56% | -2.56% | -291.71% |
* Utilities Sector Average
TSE:ACO.X
ATCO Ltd Cl I NV
69.14
20.30
41.56%
TSE:TA
TransAlta
17.63
5.11
40.77%
TSE:CPX
Capital Power
63.82
12.03
23.22%
TSE:CU
Canadian Utilities A
48.29
12.74
35.85%
TSE:AQN
Algonquin Power & Utilities
7.94
0.47
6.32%
TSE:BIPC
Brookfield Infrastructure
54.68
1.74
3.29%
ATCO Ltd Cl I NV Corporate Events
Business Operations and StrategyFinancial Disclosures
ATCO Sets May 6 Date to Unveil First-Quarter 2026 Results
Neutral
Apr 10, 2026
ATCO Ltd. will release its financial results for the quarter ended March 31, 2026 on May 6, 2026, posting full financial statements and management commentary on its website and distributing the announcement via a major newswire service. The compan...
Dividends
ATCO Ltd. Declares Eligible Quarterly Dividend on Class I and II Shares
Positive
Apr 9, 2026
ATCO Ltd., a diversified global provider of energy, infrastructure, modular structures and support services, operates across electricity and natural gas networks, sustainable energy solutions, housing, and logistics, leveraging a workforce of abou...
Business Operations and StrategyExecutive/Board Changes
ATCO Ltd. Announces Board Resignation and Reassigns Governance Roles
Neutral
Apr 6, 2026
ATCO Ltd. announced that Roger Urwin has resigned from the boards of ATCO Ltd., Canadian Utilities, CU Inc. and ATCO Australia, prompting a reassignment of board and committee responsibilities to maintain continuity of oversight. The company empha...
Business Operations and StrategyM&A Transactions
ATCO Buys 40% Stake in Inuit-Led Grays Bay Port and Road Project
Positive
Mar 23, 2026
ATCO Ltd. will invest approximately $10 million for a 40 per cent stake in West Kitikmeot Resources Corp., the Inuit-backed developer of the Grays Bay Road and Port Project in Nunavut. The project combines a deepwater Arctic port, a 230-kilometre ...
Business Operations and StrategyFinancial Disclosures
ATCO lifts adjusted earnings in 2025 as new contracts and major pipeline project bolster growth
Positive
Feb 26, 2026
ATCO reported 2025 adjusted earnings of $518 million, up $37 million from 2024, driven by its core operations, while IFRS earnings fell sharply to $150 million due to non-cash impairments and write-offs that produced a fourth-quarter loss. The mix...
Business Operations and Strategy
ATCO JV Wins $596M, 10-Year U.S. Air Force Alaska Radar System Deal
Positive
Feb 23, 2026
ATCO Frontec, through its ARCTEC Alaska joint venture with ASRC Federal, has secured a 10-year, roughly $596 million U.S. Air Force contract to operate and maintain the Alaska Radar System starting in September 2026. The deal covers 15 long-range ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.