tiprankstipranks
Trending News
More News >
Atco Ltd. Cl I Nv (TSE:ACO.X)
:ACO.X
Advertisement

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

Compare
238 Followers

Top Page

TSE:ACO.X

ATCO Ltd Cl I NV

(TSX:ACO.X)

Rating:78Outperform
Price Target:
C$57.00
▲(13.59%Upside)
ATCO Ltd's robust earnings growth and strategic expansions are the primary drivers of its favorable stock score. Strong financial performance and attractive valuation metrics contribute positively, though technical indicators show a mixed short-term sentiment. Despite minor challenges in profitability and leverage, the company's strategic initiatives and cash flow management provide a solid foundation for future growth.
Positive Factors
Earnings Performance
The strong earnings report signaled a robust start to the year, driven by consistent growth in Alberta utilities and a resilient contribution from ATCO Structures.
Growth Potential
Initiate at BUY: Florida weighting underpins growth potential.
Growth Trajectory
The creation of the ATCO Investments segment is expected to contribute to the company's growth trajectory.
Negative Factors
Market Sentiment
Despite strong results and positive revisions, ACO.X shares traded down in the broad utility sell-off.
Stock Performance
ACO.X shares underperformed compared to utility peers despite a positive earnings report and outlook.

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., 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 residential housing; modular facilities; construction and site support; workforce lodging; facility operations and maintenance; defense operations; and disaster and emergency management services. It also provides commercial real estate services, including sale of commercial and industrial properties; and bulk cargo and port operation services, as well as operates container port facilities. The company's portfolio includes 14 commercial real estate properties, including 417,000 square feet of office property, 60,000 square feet of industrial property, and 315 acres of land. In addition, it engages in electricity generation, distribution, transmission, and related infrastructure services; natural gas distribution; owns and operates natural gas transmission pipelines in Alberta, Saskatchewan, and northern regions of Canada, as well as in Western Australia; and builds, owns, and operates non-regulated industrial water, natural gas storage, natural gas liquids storage, and natural gas related infrastructure to serve the midstream and petrochemical sectors. Further, it sells electricity and natural gas to residential and commercial customers; and provides natural gas appliance demonstrations and small cooking schools for homemakers. ATCO Ltd. was founded in 1947 and is headquartered in Calgary, Canada. ATCO Ltd. operates as a subsidiary of Sentgraf Enterprises Ltd.
How the Company Makes MoneyATCO Ltd generates revenue through a variety of channels. Its utility operations, which include electricity and natural gas transmission and distribution, are regulated and provide a stable revenue stream through customer billing for energy consumption and usage fees. The structures & logistics segment contributes to revenue by offering modular building solutions and related services, often for remote or temporary projects. The energy segment earns through the generation and sale of electricity, as well as retail energy sales to residential and commercial customers. ATCO's transportation business involves providing logistical support and transportation services, while the company also explores opportunities in renewable energy and sustainable infrastructure, which could contribute to future revenue growth. Key factors contributing to ATCO's earnings include long-term contracts, government regulation, and strategic partnerships with other energy companies.

ATCO Ltd Cl I NV Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q1-2025)
|
% Change Since: -1.90%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
ATCO had a robust start to 2025 with significant earnings growth and strategic expansions, particularly in its Structures and Investments segments. Despite facing some challenges such as reduced ROE for Alberta Utilities and minor impacts from tariffs, the company's strong cash flow and growth initiatives in modular housing and port operations paint a positive outlook.
Q1-2025 Updates
Positive Updates
Strong Start to 2025
ATCO achieved adjusted earnings of $160 million in Q1 2025, an increase of $12 million or 8% compared to the previous year.
ATCO Structures Growth
ATCO Structures delivered adjusted earnings of $26 million, $2 million higher than in Q1 2024, marking the 11th consecutive quarter of year-over-year adjusted earnings growth.
Neltume Ports Performance
Adjusted earnings for Neltume Ports increased by $3 million compared to the previous year, driven by improved cargo mix and margin.
Cash Flow Improvement
ATCO's standalone businesses reported cash flow from operating activities of $120 million, up from $52 million in the prior year.
Expansion in Australia
ATCO Structures opened a new manufacturing and commercial operations facility in Adelaide, South Australia, to meet growing customer needs.
Negative Updates
Reduced ROE for Alberta Utilities
The Alberta Utilities allowable ROE was reset from 9.28% in 2024 to 8.97% for 2025, with the efficiency carryover mechanism from 2023-2024 coming to an end.
Impact of Trade Uncertainty
There was a short pause in decision-making among customers during election transition periods, although it did not have a major impact on project decisions.
Tariff and Margin Impact
Slight impact on margins from tariffs, particularly in housing components like appliances coming from the US.
Company Guidance
During the first quarter of 2025, ATCO Ltd. reported adjusted earnings of $160 million, marking an 8% increase from the previous year. This growth was driven primarily by increased activity at ATCO Structures, rate base growth, and cost efficiencies at ATCO Energy Systems, as well as stronger seasonal spreads in natural gas storage services at ATCO EnPower. The company's operating segments were simplified with the inclusion of ATCO Investments, which contributed through its 40% equity investment in Neltume Ports and the acquisition of ATCO Energy in mid-2024. ATCO Structures achieved adjusted earnings of $26 million, largely due to workforce housing sale activity in Australia, while Neltume Ports experienced a $3 million increase in adjusted earnings due to an improved cargo mix and operational margin. The company's cash flow from operating activities rose to $120 million, a significant increase from the previous year's $52 million, reflecting successful efficiency initiatives. Overall, ATCO Ltd. demonstrated a strong start to the year, leveraging its diverse portfolio to capitalize on growth opportunities amidst a challenging macroeconomic environment.

ATCO Ltd Cl I NV Financial Statement Overview

Summary
ATCO Ltd Cl I NV exhibits strong financial performance with consistent revenue growth and efficient cost management. Operating margins are healthy, though there are slight profitability concerns due to a decreasing net profit margin. The balance sheet reflects moderate leverage, posing potential risks from high debt levels. Cash flow performance is robust, indicating effective cash management and investment capabilities.
Income Statement
78
Positive
The company's income statement shows consistent revenue growth with a TTM (Trailing-Twelve-Months) increase of 1.76% compared to the previous annual period. The gross profit margin is strong at 62.37%, indicating efficient cost management. The EBIT and EBITDA margins are healthy at 27.05% and 44.01% respectively, demonstrating solid operating performance. However, the net profit margin decreased slightly to 8.49% in TTM, suggesting potential profitability challenges.
Balance Sheet
70
Positive
The balance sheet reflects a moderate debt-to-equity ratio of 2.58, highlighting the company's reliance on debt financing. The return on equity stands at 9.03%, indicating reasonable shareholder returns. The equity ratio is 17.45%, suggesting a balanced approach to asset financing, but there is room for improvement in leveraging equity more effectively.
Cash Flow
82
Very Positive
Cash flow analysis reveals a strong operating cash flow to net income ratio of 5.62, highlighting effective cash generation relative to profits. The free cash flow to net income ratio is 1.14, indicating robust free cash flow generation. The free cash flow growth rate increased by 23.93% in the TTM, showcasing improved cash management and investment capabilities.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.03B4.94B4.74B4.98B4.29B3.94B
Gross Profit3.14B3.11B3.03B3.12B2.72B2.59B
EBITDA2.21B2.26B2.27B1.97B1.76B1.75B
Net Income427.00M430.00M432.00M707.00M246.00M497.00M
Balance Sheet
Total Assets27.10B26.72B25.36B24.14B23.00B22.20B
Cash, Cash Equivalents and Short-Term Investments957.00M703.00M576.00M1.03B1.07B1.06B
Total Debt12.19B11.98B11.17B10.20B10.15B9.72B
Total Liabilities18.25B18.01B16.86B15.79B15.05B14.35B
Stockholders Equity4.73B4.63B4.42B4.38B4.11B4.05B
Cash Flow
Free Cash Flow487.00M393.00M400.00M813.00M518.00M815.00M
Operating Cash Flow2.40B2.20B1.97B2.40B1.86B1.84B
Investing Cash Flow-1.85B-1.80B-2.58B-1.50B-1.38B-1.06B
Financing Cash Flow-500.00M-588.00M-123.00M-953.00M-486.00M-823.00M

ATCO Ltd Cl I NV Technical Analysis

Technical Analysis Sentiment
Negative
Last Price50.18
Price Trends
50DMA
50.98
Negative
100DMA
50.15
Positive
200DMA
48.41
Positive
Market Momentum
MACD
0.14
Negative
RSI
43.88
Neutral
STOCH
64.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACO.X, the sentiment is Negative. The current price of 50.18 is below the 20-day moving average (MA) of 50.75, below the 50-day MA of 50.98, and above the 200-day MA of 48.41, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 43.88 is Neutral, neither overbought nor oversold. The STOCH value of 64.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ACO.X.

ATCO Ltd Cl I NV Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
C$5.69B12.839.50%3.96%7.64%14.22%
72
Outperform
C$8.01B26.687.52%4.72%-0.51%-17.17%
69
Neutral
C$9.01B18.1710.00%4.49%-16.83%-37.24%
63
Neutral
HK$30.46B8.715.37%4.74%-3.09%4.51%
$4.54B5.54%4.36%
$13.99B22.637.12%1.12%
$5.15B
4.28%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ACO.X
ATCO Ltd Cl I NV
50.18
8.42
20.16%
TSE:CPX
Capital Power
58.08
17.24
42.21%
TSE:CU
Canadian Utilities A
38.58
6.94
21.93%
AQN
Algonquin Power & Utilities
5.90
0.04
0.68%
EMA
Emera
47.00
12.30
35.45%
BIPC
Brookfield Infrastructure
39.04
2.70
7.43%

ATCO Ltd Cl I NV Corporate Events

Business Operations and StrategyFinancial Disclosures
ATCO Ltd. Reports Strong Q2 2025 Earnings and Strategic Growth Initiatives
Positive
Jul 31, 2025

ATCO Ltd. reported an increase in second-quarter 2025 adjusted earnings to $101 million, reflecting growth in its operations. The company expanded its market presence through strategic initiatives, including new contracts in Canada and the U.S., and a new manufacturing facility in Australia. Canadian Utilities invested heavily in regulated utilities, advancing significant projects like the Yellowhead Pipeline and CETO, which are crucial for energy infrastructure development. ATCO EnPower benefited from favorable market conditions, boosting its natural gas storage revenues. The company’s strategic developments are expected to enhance its industry positioning and stakeholder value.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 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 Q2 2025 Financial Results
Neutral
Jul 10, 2025

ATCO Ltd. announced it will release its second-quarter financial results for 2025 on July 31. The company will host a live teleconference and webcast to discuss the results, featuring key executives. This announcement is significant as it provides stakeholders with insights into the company’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 Buy with a C$52.50 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
Jul 10, 2025

ATCO Ltd.’s Board of Directors has declared quarterly dividends for its Class I Non-Voting and Class II Voting shares, each amounting to $0.5045 per share, payable on September 30, 2025. This announcement reinforces ATCO’s commitment to shareholder returns and highlights its financial stability, potentially impacting investor confidence positively.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$49.00 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.

Legal ProceedingsBusiness Operations and StrategyRegulatory Filings and Compliance
ATCO Ltd. Challenges AUC Decision, Upholds Commitment to Cost Savings
Negative
May 29, 2025

ATCO Ltd., a major utility provider in Alberta, has expressed disappointment with the Alberta Utilities Commission’s (AUC) recent decision regarding regulatory rules, which they believe are being interpreted differently than before. Despite this, ATCO remains committed to reducing distribution costs and has already achieved over $500 million in savings for Albertans from 2023 to 2028, maintaining its position as the only utility in Alberta to reduce distribution costs by 8% during the current regulatory term. The company plans to appeal the AUC’s decision and continues to advocate for a fair regulatory framework that ensures affordability and efficiency for customers.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 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’s Efficiency Initiatives to Save Alberta Customers Over $500 Million
Positive
May 26, 2025

ATCO Ltd. announced that its ATCO Gas and ATCO Electric businesses are set to save Alberta utility customers over $500 million in distribution rates from 2023 to 2028, thanks to efficiency measures and cost-saving initiatives. This marks an eight percent reduction in distribution rates, making ATCO the only utility in Alberta to offer such reductions during this period. The initiative underscores ATCO’s commitment to affordability and reliability for its customers, while advocating for a supportive regulatory environment that fosters innovation and efficiency.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 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.

Private Placements and FinancingBusiness Operations and Strategy
ATCO Ltd. Issues $250 Million in Senior Unsecured Notes
Positive
May 22, 2025

ATCO Ltd. announced the issuance of $250 million in Senior Unsecured Notes with a 3.878% yield, maturing in 2030. The proceeds will be used to repay existing debts and for general corporate purposes, potentially strengthening the company’s financial position and supporting its diverse operations across multiple industries.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 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 ChangesShareholder Meetings
ATCO Ltd. Announces Successful Director Elections at Annual Meeting
Positive
May 14, 2025

ATCO Ltd. announced the successful election of nine directors at its Annual Meeting of Share Owners, with each nominee receiving over 96% of votes in favor. This election reinforces ATCO’s governance structure as the company continues to address global challenges in energy, housing, and infrastructure, potentially impacting its strategic direction and stakeholder engagement.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 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 ChangesBusiness Operations and Strategy
Leadership Changes at Canadian Utilities: Southern and Myles Take Key Roles
Positive
May 8, 2025

Canadian Utilities Limited has announced the appointment of Nancy Southern as Executive Chair and Bob Myles as Chief Executive Officer, effective May 8, 2025. Nancy Southern will continue to guide the company’s strategic direction and advocate for national issues, while Bob Myles will oversee the company’s diverse operations, leveraging his extensive experience in the utilities and energy sectors. This leadership change is expected to drive Canadian Utilities into a more modernized and growth-oriented era, enhancing its operational success and stakeholder relationships.

Business Operations and Strategy
ATCO Ltd. Advances Sustainability with 2024 Report
Positive
May 7, 2025

ATCO Ltd. has released its 2024 Sustainability Report, highlighting significant advancements in its environmental, social, and governance (ESG) performance. Key achievements include the installation of 118,000 smart meters in Alberta, significant reductions in greenhouse gas emissions, and substantial economic benefits to Indigenous groups. The company also invested in community initiatives and was recognized as a top employer. These efforts underscore ATCO’s commitment to sustainability and its strategic focus on fostering innovation and resilience in the energy sector.

Business Operations and StrategyFinancial Disclosures
ATCO Ltd. Reports Strong Q1 2025 Earnings and Strategic Growth
Positive
May 7, 2025

ATCO Ltd. reported first-quarter 2025 adjusted earnings of $160 million, an increase from the previous year, highlighting strong performance in its energy and infrastructure sectors. The company secured significant contracts across Canada, the US, and Australia, and invested heavily in regulated utilities, indicating robust growth and market expansion.

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: Aug 01, 2025