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Aecon Group Inc.
(TSX:ARE)
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Rating:58Neutral
Price Target:
C$56.00
▲(19.91% Upside)
Action:Reiterated
Date:05/28/26
The score reflects improving fundamentals led by stronger operating and free cash flow and a return to positive earnings, tempered by very thin margins and historically volatile results. Technical indicators currently point to weak momentum (negative MACD and price below the 20DMA), and valuation is hard to assess due to a negative P/E despite a modest dividend yield.
Positive Factors
Diversified infrastructure services
Aecon's broad service set across civil, industrial and building sectors and its work for both public and private clients creates durable demand exposure. Long-term public infrastructure programs and alternative delivery models support multi-year revenue visibility and reduce single-market dependence.
Negative Factors
Very thin operating margins
Margins near zero offer little cushion against cost overruns, schedule delays, or input price inflation common in construction. Persistently thin operating profit limits retained earnings, constrains reinvestment, and raises the chance that single project issues materially impair long‑term returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified infrastructure services
Aecon's broad service set across civil, industrial and building sectors and its work for both public and private clients creates durable demand exposure. Long-term public infrastructure programs and alternative delivery models support multi-year revenue visibility and reduce single-market dependence.
Read all positive factors
Aecon Group Inc. (ARE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.69B
Dividend Yield2.38%
Average Volume (3M)372.83K
Price to Earnings (P/E)98.1
Beta (1Y)0.46
Revenue Growth26.30%
EPS GrowthN/A
CountryCA
Employees8,785
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)0.55
Shares Outstanding68,467,320
10 Day Avg. Volume309,014
30 Day Avg. Volume372,832
Financial Highlights & Ratios
PEG Ratio-1.04
Price to Book (P/B)2.14
Price to Sales (P/S)0.36
P/FCF Ratio32.88
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$56.20Price Target Upside20.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)1.48
Revenue Forecast (FY)C$6.03B
Aecon Group Inc. Business Overview & Revenue Model
Company Description
Aecon Group Inc., alongside its subsidiaries, delivers a comprehensive array of construction and infrastructure development services to both private and public sector clients across Canada, the United States, and globally. The company operates thr...
How the Company Makes Money
Aecon makes money primarily by executing construction and infrastructure projects under contract for public-sector owners (e.g., government agencies and crown corporations) and private-sector customers (e.g., industrial and commercial clients). Re...
Aecon Group Inc. Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presented a clear positive operational and financial turnaround: record revenue (+28% YoY), materially improved profitability (operating profit vs prior-year loss, adjusted EBITDA recovery), a large and diversified backlog ($10.7B), reduced legacy project losses, and strategic M&A and contract wins that position the company for continued growth—particularly in power, nuclear and U.S. markets. Offsetting items include a weaker concessions quarter, remaining—but shrinking—legacy project impacts, some sector mix headwinds that pressured margins, and the multi‑year timing of several large strategic opportunities meaning bookings and material revenue from some initiatives will normalize rather than repeat 2025’s exceptional pace. Overall, the positive achievements and materially improved financials outweigh the remaining challenges.Positive Updates
Record Revenue
Reported revenue of $5.4 billion in FY2025, up 28% YoY (an increase of $1.2 billion), with 84% of the revenue growth organic.
Negative Updates
Concessions Segment Pressure
Concessions Adjusted EBITDA declined to $57 million in 2025 from $87 million in 2024 (down ~34%), driven by lower O&M income and fewer management/development fees as projects near or reach substantial completion.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue
Reported revenue of $5.4 billion in FY2025, up 28% YoY (an increase of $1.2 billion), with 84% of the revenue growth organic.
Read all positive updates
Company Guidance
Aecon guided that 2026 revenue is expected to exceed 2025 levels (2025 revenue $5.4 billion, up 28% YoY) and that the construction segment should see stabilization and a gradual improvement in Adjusted EBITDA margins as the company benefits from a stronger, more risk‑adjusted backlog (record year‑end backlog $10.7 billion; $9.5 billion of new awards in 2025) and continued reduction of legacy project losses (legacy losses $94 million in 2025 vs $273 million in 2024); management highlighted 2025 adjusted EBITDA of $235 million (construction as‑adjusted Adjusted EBITDA $315 million, ~6% margin), adjusted diluted EPS of $0.40, recurring revenue of $926 million (utility recurring revenue up to $728 million from $610 million), and said it will pursue disciplined capital allocation — including M&A, divestitures, organic growth, dividends (quarterly dividend $0.1925/share after a $0.01 annualized increase), capital investments and opportunistic buybacks — while maintaining a strong liquidity position (core cash $94 million plus $393 million JV cash; $1.0 billion committed revolver with $257 million drawn and $4 million in letters of credit; no material debt maturities until 2029 except equipment loans).Aecon Group Inc. Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
64
Positive
Cash Flow
69
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.63B | 5.43B | 4.24B | 4.64B | 4.70B | 3.98B |
| Gross Profit | 398.23M | 287.64M | 182.55M | 255.63M | 355.96M | 328.12M |
| EBITDA | 193.45M | 194.35M | -65.06M | 48.40M | 129.04M | 122.05M |
| Net Income | 35.15M | 15.16M | -59.52M | 161.89M | 30.38M | 49.68M |
Balance Sheet | ||||||
| Total Assets | 4.04B | 3.99B | 3.23B | 3.20B | 3.57B | 3.29B |
| Cash, Cash Equivalents and Short-Term Investments | 506.65M | 486.02M | 438.02M | 645.78M | 485.05M | 630.69M |
| Total Debt | 457.59M | 600.70M | 464.72M | 418.19M | 909.06M | 779.63M |
| Total Liabilities | 2.97B | 3.06B | 2.26B | 2.13B | 2.61B | 2.37B |
| Stockholders Equity | 1.07B | 921.74M | 956.12M | 1.06B | 954.00M | 913.57M |
Cash Flow | ||||||
| Free Cash Flow | 189.96M | 60.05M | -23.08M | 46.41M | -142.39M | -63.65M |
| Operating Cash Flow | 258.93M | 126.62M | 28.65M | 64.93M | -109.68M | -28.27M |
| Investing Cash Flow | -192.27M | -89.92M | -180.66M | 344.90M | -36.22M | -55.76M |
| Financing Cash Flow | 41.76M | 14.54M | -58.26M | -141.91M | -11.86M | -52.28M |
Aecon Group Inc. Technical Analysis
Positive
46.70
Price Trends
47.09
Positive
45.46
Positive
37.82
Positive
Market Momentum
1.86
Negative
66.94
Neutral
83.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ARE, the sentiment is Positive. The current price of 46.7 is below the 20-day moving average (MA) of 48.20, below the 50-day MA of 47.09, and above the 200-day MA of 37.82, indicating a bullish trend. The MACD of 1.86 indicates Negative momentum. The RSI at 66.94 is Neutral, neither overbought nor oversold. The STOCH value of 83.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ARE.
Aecon Group Inc. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$3.18B | 33.57 | 23.71% | 0.99% | 13.42% | 17.76% | |
70 Outperform | C$14.30B | 5.77 | 48.91% | 0.09% | 16.01% | 776.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | C$4.24B | 85.06 | 11.25% | 2.88% | 1.05% | -50.79% | |
61 Neutral | C$11.11B | 22.65 | 15.21% | 0.67% | 7.61% | 27.00% | |
61 Neutral | C$24.45B | 24.67 | 10.39% | 0.60% | 8.70% | 33.66% | |
58 Neutral | C$3.69B | 98.05 | 3.71% | 2.38% | 26.30% | ― |
* Industrials Sector Average
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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.