Aecon Group Inc. (TSE:ARE)
TSX:ARE
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Aecon Group Inc.
(TSX:ARE)
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Rating:64Neutral
Price Target:
C$59.00
â–²(26.34% Upside)
Action:Downgraded
Date:04/30/26
The score is driven primarily by improving financial performance (notably stronger cash flow and a return to profitability) and supportive earnings-call signals (record backlog and guidance for higher 2026 revenue with gradual margin improvement). These positives are tempered by very thin underlying margins and historical volatility, and a demanding valuation (very high P/E) despite only a modest dividend yield; technicals are strong but extended.
Positive Factors
Large, diversified backlog
A record $10.7B backlog with exceptionally strong 2025 awards provides multi-year revenue visibility and a diversified project pipeline across sectors and geographies. This reduces near-term bidding risk and supports steady execution cadence, improving predictability of cash inflows over the coming 2–6 months and beyond.
Negative Factors
Very thin operating margins
Sub-1.5% operating margins leave minimal buffer for cost overruns, schedule delays, or commodity inflation common in construction. Structurally thin margins mean small execution issues can wipe out profitability, increasing earnings sensitivity to project mix and reducing sustainable internal returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Large, diversified backlog
A record $10.7B backlog with exceptionally strong 2025 awards provides multi-year revenue visibility and a diversified project pipeline across sectors and geographies. This reduces near-term bidding risk and supports steady execution cadence, improving predictability of cash inflows over the coming 2–6 months and beyond.
Read all positive factors
Aecon Group Inc. (ARE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.47B
Dividend Yield2.38%
Average Volume (3M)372.83K
Price to Earnings (P/E)―
Beta (1Y)0.57
Revenue Growth26.30%
EPS GrowthN/A
CountryCA
Employees9,427
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$52.67Price Target Upside12.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)1.56
Revenue Forecast (FY)C$5.83B
Aecon Group Inc. Business Overview & Revenue Model
Company Description
Aecon Group Inc., together with its subsidiaries, provide construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally. It operates through two segments, Construction a...
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 23, 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 | 185.76M | 149.44M | -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
40.60
Positive
36.03
Positive
29.38
Positive
Market Momentum
1.78
Negative
71.27
Negative
90.37
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 above the 20-day moving average (MA) of 43.75, above the 50-day MA of 40.60, and above the 200-day MA of 29.38, indicating a bullish trend. The MACD of 1.78 indicates Negative momentum. The RSI at 71.27 is Negative, neither overbought nor oversold. The STOCH value of 90.37 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$2.82B | 606.91 | 23.71% | 0.99% | 13.42% | 17.76% | |
66 Neutral | C$3.23B | 48.37 | 10.81% | 2.88% | 1.05% | -50.79% | |
65 Neutral | C$12.14B | 30.95 | 15.28% | 0.67% | 7.61% | 27.00% | |
64 Neutral | C$3.47B | -37.51 | 3.71% | 2.38% | 26.30% | ― | |
64 Neutral | C$13.94B | 39.61 | 52.10% | 0.09% | 16.01% | 776.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$26.10B | 50.64 | 10.39% | 0.60% | 8.70% | 33.66% |
* Industrials Sector Average
TSE:ARE
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Aecon Group Inc. Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Aecon Raises $172.5 Million in Bought Deal Share Offering to Strengthen Balance Sheet
Positive
Mar 27, 2026
Aecon Group Inc. has closed a bought deal offering of 4,395,300 common shares at $39.25 per share, including the full exercise of the over-allotment option, raising gross proceeds of approximately $172.5 million. The offering was led by a syndicat...
Financial Disclosures
Aecon to Release First-Quarter 2026 Results and Host Investor Call
Neutral
Mar 26, 2026
Aecon Group Inc. plans to release its first quarter 2026 financial results after markets close on April 28, 2026, followed by a live webcast and conference call on the morning of April 29. An accompanying investor presentation will be posted onlin...
Business Operations and Strategy
Aecon JV Secures US$691 Million Howard A. Hanson Dam Contract in Washington State
Positive
Mar 25, 2026
Aecon Group Inc. said a joint venture in which it holds a 40% stake has finalized a US$691 million contract with the U.S. Army Corps of Engineers to build the Howard A. Hanson Dam Additional Water Storage Fish Passage Facility in Washington State....
Private Placements and FinancingRegulatory Filings and Compliance
Aecon Files Final Prospectus for $150 Million Equity Offering
Positive
Mar 24, 2026
Aecon Group Inc. has filed a final short form prospectus in Canada to support a previously announced bought deal offering of 3,822,000 common shares from treasury, priced at $39.25 per share for gross proceeds of about $150 million. The company ha...
Business Operations and StrategyPrivate Placements and Financing
Aecon Launches $150 Million Bought Deal Share Offering to Bolster Balance Sheet
Positive
Mar 11, 2026
Aecon Group Inc. has launched a $150 million bought deal offering of 3,822,000 common shares from treasury, priced at $39.25 per share and led by a syndicate of underwriters including CIBC Capital Markets and TD Securities Inc. The deal, conducted...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Aecon Utilities Buys Duna Services and Stake in KNX to Boost U.S. Power Infrastructure Business
Positive
Mar 9, 2026
Aecon Group’s utilities subsidiary has moved to expand its U.S. electrical utility services by acquiring Duna Services and its subsidiaries, along with a 49% stake in KNX Utility Services, for a base purchase price of US$60 million financed ...
Business Operations and StrategyExecutive/Board Changes
Aecon Adds Veteran Nuclear and Power Executive Jeff Lyash to Board
Positive
Mar 5, 2026
Aecon Group Inc. has appointed veteran nuclear and power executive Jeff Lyash to its Board of Directors, effective immediately, with plans for him to stand for election at the company’s next annual meeting on June 1, 2026. His appointment is...
Business Operations and Strategy
Aecon-Led Partnership Secures Key Role in Arctic Over-the-Horizon Radar Project
Positive
Mar 4, 2026
Aecon Group Inc., together with partners Pomerleau and Stantec, has signed an agreement with Defence Construction Canada to deliver Stage 1 of the Arctic Over-the-Horizon Radar Program in Ontario under an Integrated Project Delivery model. An Aeco...
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.