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ATCO Ltd Cl I NV (TSE:ACO.X)
TSX:ACO.X
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ATCO Ltd Cl I NV (ACO.X) AI Stock Analysis

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TSE:ACO.X

ATCO Ltd Cl I NV

(TSX:ACO.X)

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Outperform 73 (OpenAI - 4o)
Rating:73Outperform
Price Target:
C$62.00
▲(12.44% Upside)
ATCO Ltd's overall stock score is driven by strong technical indicators and a positive earnings call, reflecting growth in earnings and cash flow. The valuation is reasonable, with an attractive dividend yield. However, financial performance is slightly hindered by high leverage and declining free cash flow, which are areas for improvement.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong demand for ATCO's services and products, supporting long-term business stability and expansion.
Cash Flow Strength
Strong operating cash flow enhances ATCO's ability to fund strategic investments and manage debt, supporting sustainable growth.
Strategic Investments
Strategic investments in infrastructure like Neltume Ports diversify revenue streams and strengthen market position.
Negative Factors
High Leverage
High leverage can limit financial flexibility and increase risk, potentially impacting ATCO's ability to invest and grow.
Declining Free Cash Flow
Declining free cash flow may restrict ATCO's capacity to fund new projects or reduce debt, affecting long-term financial health.
Alberta Utilities ROE Reset
The ROE reset in Alberta utilities could reduce profitability, impacting ATCO's earnings from regulated operations.

ATCO Ltd Cl I NV (ACO.X) vs. iShares MSCI Canada ETF (EWC)

ATCO Ltd Cl I NV Business Overview & Revenue Model

Company DescriptionATCO Ltd Cl I NV (ACO.X) is a diversified global corporation headquartered in Canada, primarily engaged in the utility and energy sectors. The company operates through various segments, including electric power generation, natural gas distribution, and infrastructure development. ATCO offers a range of core products and services, including modular construction, renewable energy solutions, and utility services, aimed at supporting resource development and providing essential services to communities and industries.
How the Company Makes MoneyATCO Ltd generates revenue primarily through its regulated utility operations, which include electricity and natural gas distribution services. The company earns a significant portion of its income from providing essential utility services to residential, commercial, and industrial customers, benefiting from stable demand and regulated pricing structures. Additionally, ATCO's modular construction and infrastructure services contribute to its revenue, particularly through contracts for custom-built facilities and infrastructure projects. The company also invests in renewable energy projects, which provide additional income through power generation and government incentives. Strategic partnerships with various stakeholders, including government entities and private sector clients, help facilitate large-scale projects and secure long-term contracts, thus enhancing its revenue stability.

ATCO Ltd Cl I NV Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Feb 26, 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.
Q2-2025 Updates
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.
Successful ATCO Structures Performance
ATCO Structures delivered adjusted earnings of $32 million, up $2 million compared to Q2 2024, driven by increased modular construction activity and workforce housing sales.
Strong Cash Flow and Investment
ATCO's cash flow from operating activities reached $192 million year-to-date, up over 30% compared to the previous year, allowing for increased capital spending.
Neltume Ports Investment Growth
Neltume Ports delivered adjusted earnings growth of $1 million compared to Q2 2024 and commenced construction on the Vancouver Bulk Terminal.
Increased Capital Expenditures
Year-to-date capital expenditures for ATCO stand-alone businesses were $117 million, up $43 million year-over-year, primarily due to increased spending on rental fleet additions.
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.
Discount in Structures Market Value
ATCO Structures is perceived to be trading at a discount compared to peers, despite consistent performance and growth.
Uncertain Timing for Defense Spending Benefits
While optimistic about increased defense spending, the timeline for seeing new contracts in the Frontec segment remains uncertain.
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
ATCO Ltd demonstrates solid revenue growth and operational efficiency, as seen in its income statement. However, the high leverage indicated in the balance sheet could pose financial risks if not managed carefully. Cash flow management needs improvement, particularly in converting net income into free cash flow. Overall, the company is performing well but should focus on reducing debt and improving free cash flow generation.
Income Statement
75
Positive
ATCO Ltd has shown a consistent revenue growth trend, with a notable increase in the TTM period. The gross profit margin remains strong, indicating efficient cost management. However, the net profit margin has slightly decreased over time, suggesting increased expenses or other financial pressures. The EBIT and EBITDA margins are robust, reflecting solid operational performance.
Balance Sheet
65
Positive
The company has a high debt-to-equity ratio, which poses a risk of financial leverage. Despite this, the return on equity is relatively stable, indicating effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced approach to financing assets through equity.
Cash Flow
60
Neutral
Operating cash flow is strong, with a healthy coverage ratio over net income. However, the free cash flow has shown a declining trend, which could impact future investments or debt repayments. The free cash flow to net income ratio indicates that a smaller portion of net income is being converted into free cash flow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.08B4.94B4.74B4.98B4.29B3.94B
Gross Profit3.15B3.11B3.03B3.12B2.72B2.59B
EBITDA2.00B1.94B1.95B2.03B1.62B1.62B
Net Income439.00M430.00M432.00M370.00M246.00M252.00M
Balance Sheet
Total Assets26.80B26.72B25.36B24.14B23.00B22.20B
Cash, Cash Equivalents and Short-Term Investments785.00M713.00M592.00M1.03B1.09B1.10B
Total Debt12.20B11.98B11.17B10.20B10.15B9.72B
Total Liabilities17.95B18.01B16.86B15.79B15.05B14.35B
Stockholders Equity4.73B4.63B4.42B4.38B4.11B4.05B
Cash Flow
Free Cash Flow-55.00M-27.00M57.00M535.00M263.00M490.00M
Operating Cash Flow1.81B1.66B1.48B1.97B1.46B1.43B
Investing Cash Flow-1.95B-1.80B-2.58B-1.50B-1.38B-1.06B
Financing Cash Flow301.00M-55.00M362.00M-527.00M-85.00M-410.00M

ATCO Ltd Cl I NV Technical Analysis

Technical Analysis Sentiment
Positive
Last Price55.14
Price Trends
50DMA
52.69
Positive
100DMA
51.27
Positive
200DMA
50.12
Positive
Market Momentum
MACD
0.69
Positive
RSI
56.46
Neutral
STOCH
38.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACO.X, the sentiment is Positive. The current price of 55.14 is above the 20-day moving average (MA) of 54.91, above the 50-day MA of 52.69, and above the 200-day MA of 50.12, indicating a bullish trend. The MACD of 0.69 indicates Positive momentum. The RSI at 56.46 is Neutral, neither overbought nor oversold. The STOCH value of 38.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ACO.X.

ATCO Ltd Cl I NV Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
C$6.06B13.489.32%3.64%7.75%11.25%
73
Outperform
$20.45B18.438.83%5.03%14.10%65.76%
67
Neutral
C$10.72B24.018.84%4.36%-0.94%25.64%
66
Neutral
$17.65B18.105.60%3.62%6.62%11.55%
61
Neutral
C$10.87B24.819.40%3.73%-2.99%-32.11%
56
Neutral
C$8.48B4.52%3.29%76.89%
54
Neutral
$6.62B2.04%4.26%-4.72%96.98%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ACO.X
ATCO Ltd Cl I NV
55.14
7.85
16.60%
TSE:CPX
Capital Power
60.38
1.84
3.14%
TSE:CU
Canadian Utilities A
42.03
7.75
22.61%
TSE:AQN
Algonquin Power & Utilities
8.58
2.14
33.17%
TSE:EMA
Emera
68.02
16.69
32.52%
TSE:BIPC
Brookfield Infrastructure
64.23
3.57
5.89%

ATCO Ltd Cl I NV Corporate Events

Business Operations and StrategyFinancial Disclosures
ATCO Ltd. Reports Increased Q3 Earnings and Expands Market Presence
Positive
Nov 7, 2025

ATCO Ltd. reported an increase in third-quarter 2025 adjusted earnings, reaching $103 million, up from $91 million in the same period of 2024. The company has been expanding its market presence through various contracts in the US, Canada, and Australia, enhancing its position in the energy and infrastructure sectors. Notable developments include a $179 million contract for a dormitory lodge in Idaho and significant investments in regulated utilities, with major projects like the Yellowhead Pipeline Project and the Central East Transfer-Out Project progressing well. These initiatives are expected to strengthen ATCO’s industry positioning and support renewable energy integration in Alberta.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$53.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Business Operations and StrategyExecutive/Board Changes
ATCO Ltd. Appoints Former Husky CEO Rob Peabody to Board
Positive
Nov 3, 2025

ATCO Ltd. has appointed Rob Peabody, former CEO of Husky Energy, to its Board of Directors. Peabody’s extensive experience in the oil, gas, and chemicals industries, along with his strategic leadership skills, is expected to bring valuable insights to ATCO as it continues to evolve and invest in essential services globally. This appointment is likely to strengthen ATCO’s strategic positioning in the industry and enhance its operational capabilities.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$53.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Business Operations and StrategyDelistings and Listing Changes
ATCO Ltd. Proposes Share Exchange to Streamline Capital Structure
Positive
Oct 29, 2025

ATCO Ltd. has proposed an exchange for its Class II voting shares, aiming to simplify its capital structure and improve liquidity. The proposal offers a 15% premium on existing conversion rights and tax benefits, while allowing continued participation in ATCO’s growth. The arrangement requires approval from Class II shareholders and regulatory bodies, with significant support already indicated.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$53.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Business Operations and Strategy
ATCO Structures Secures $179M Contract for Idaho Mining Project
Positive
Oct 27, 2025

ATCO Structures has secured a $179 million CAD contract to supply and install modular housing for over 1,000 workers at Perpetua Resources’ Stibnite Gold Project in Idaho. This contract is a significant step in ATCO’s U.S. expansion strategy, with manufacturing and site preparation beginning in late 2025 and installation slated for 2026. The project is crucial for Perpetua Resources as it supports the only U.S. reserve of antimony, a mineral vital for military applications, thereby receiving backing from the U.S. Department of War. The initiative underscores ATCO’s expertise in modular construction and its role in supporting large-scale industrial projects in challenging environments.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$64.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Financial Disclosures
ATCO Ltd. to Announce Q3 2025 Financial Results
Neutral
Oct 10, 2025

ATCO Ltd. announced it will release its third-quarter 2025 financial results on November 7, 2025. The company will host a live teleconference and webcast to discuss the results, with key executives participating. This announcement is significant as it provides stakeholders with insights into ATCO’s financial performance and strategic direction, potentially impacting its market positioning and investor confidence.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$55.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Dividends
ATCO Ltd. Declares Quarterly Dividends for 2025
Positive
Oct 9, 2025

ATCO Ltd. has announced the declaration of quarterly dividends for its Class I Non-Voting and Class II Voting shares, both set at $0.5045 per share, to be paid on December 31, 2025. This announcement reflects ATCO’s ongoing commitment to shareholder returns and its stable financial position, which is supported by its diverse operations across multiple sectors. The declared dividends are eligible under the Income Tax Act of Canada, indicating potential tax benefits for shareholders.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$55.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Executive/Board Changes
ATCO Ltd. Announces Board Departure of Dawn Farrell
Positive
Aug 29, 2025

ATCO Ltd. announced the resignation of Dawn Farrell from its Board of Directors following her appointment as CEO of the Major Projects Office by the Canadian federal government. This change is seen as a positive step for Canada’s infrastructure development, with ATCO’s Chair and CEO, Nancy Southern, expressing gratitude for Farrell’s contributions and leadership. The departure may impact ATCO’s board dynamics, but it aligns with the company’s commitment to supporting national growth projects.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$55.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
ATCO’s Yellowhead Pipeline Project Receives Key Regulatory Approval
Positive
Aug 22, 2025

ATCO Ltd.’s subsidiary, Canadian Utilities Limited, has received approval from the Alberta Utilities Commission for the Need Assessment Application of the Yellowhead Pipeline Project. This approval marks a significant step in ATCO’s growth strategy, focusing on energy infrastructure development. The project is expected to create 2,000 direct jobs and support 12,000 jobs annually through related investments, contributing $3.9 billion to Alberta’s GDP once operational. The pipeline will enhance Alberta’s natural gas transmission capacity, supporting economic and population growth in the province.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$55.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

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.Date of analysis: Nov 09, 2025