Aecon Group Inc. (TSE:ARE)
TSX:ARE
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Aecon Group Inc.
(TSX:ARE)
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Rating:70Outperform
Price Target:
C$44.00
▲(5.29% Upside)
Action:ReiteratedDate:03/07/26
The score is supported by improving fundamentals and upbeat guidance/backlog momentum from the latest earnings call, reinforced by strong technical uptrends and a low P/E. Offsetting these positives are still-thin profitability and a history of volatile earnings and cash flow, which keep the financial-performance component from scoring higher.
Positive Factors
Large backlog and award momentum
A $10.7B backlog with $9.5B of 2025 awards provides multi-year revenue visibility and backlog-funded work. Large, complex awards like Scarborough evidence competitive bidding capability and scale, lowering near-term revenue risk and supporting stable utilization of capacity over several years.
Negative Factors
Volatile profitability and cash flow
Aecon's earnings and cash generation have swung materially across years, reflecting project execution sensitivity. Thin net profits and intermittent negative free cash flow constrain internal funding, increase reliance on liquidity buffers, and elevate the operational execution premium required to sustain margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Large backlog and award momentum
A $10.7B backlog with $9.5B of 2025 awards provides multi-year revenue visibility and backlog-funded work. Large, complex awards like Scarborough evidence competitive bidding capability and scale, lowering near-term revenue risk and supporting stable utilization of capacity over several years.
Read all positive factors
Aecon Group Inc. (ARE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.68B
Dividend Yield2.38%
Average Volume (3M)372.83K
Price to Earnings (P/E)130.2
Beta (1Y)0.55
Revenue Growth25.68%
EPS GrowthN/A
CountryCA
Employees9,427
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)0.52
Shares Outstanding64,072,020
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$42.96Price Target Upside2.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.6
Revenue Forecast (FY)C$5.79B
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 Group Inc. generates revenue primarily through its construction services, which include bidding on and executing large-scale projects in civil, industrial, and infrastructure sectors. The company's revenue model is driven by fixed-price and ...
Aecon Group Inc. Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 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
54
Neutral
Balance Sheet
63
Positive
Cash Flow
48
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.43B | 4.24B | 4.64B | 4.70B | 3.98B |
| Gross Profit | 287.64M | 182.55M | 255.63M | 355.96M | 328.12M |
| EBITDA | 149.44M | -65.06M | 48.40M | 129.04M | 122.05M |
| Net Income | 15.16M | -59.52M | 161.89M | 30.38M | 49.68M |
Balance Sheet | |||||
| Total Assets | 3.99B | 3.23B | 3.20B | 3.57B | 3.29B |
| Cash, Cash Equivalents and Short-Term Investments | 486.02M | 438.02M | 645.78M | 485.05M | 630.69M |
| Total Debt | 600.70M | 464.72M | 418.19M | 909.06M | 779.63M |
| Total Liabilities | 3.06B | 2.26B | 2.13B | 2.61B | 2.37B |
| Stockholders Equity | 921.74M | 956.12M | 1.06B | 954.00M | 913.57M |
Cash Flow | |||||
| Free Cash Flow | 60.05M | -23.08M | 46.41M | -142.39M | -63.65M |
| Operating Cash Flow | 126.62M | 28.65M | 64.93M | -109.68M | -28.27M |
| Investing Cash Flow | -89.92M | -180.66M | 344.90M | -36.22M | -55.76M |
| Financing Cash Flow | 14.54M | -58.26M | -141.91M | -11.86M | -52.28M |
Aecon Group Inc. Technical Analysis
Positive
41.79
Price Trends
37.87
Positive
33.63
Positive
27.64
Positive
Market Momentum
1.44
Positive
57.81
Neutral
50.06
Neutral
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 41.79 is above the 20-day moving average (MA) of 40.89, above the 50-day MA of 37.87, and above the 200-day MA of 27.64, indicating a bullish trend. The MACD of 1.44 indicates Positive momentum. The RSI at 57.81 is Neutral, neither overbought nor oversold. The STOCH value of 50.06 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | C$14.33B | 5.72 | 56.38% | 0.09% | 13.97% | 715.65% | |
70 Outperform | C$2.68B | 130.21 | 1.66% | 2.38% | 25.68% | ― | |
70 Outperform | C$28.68B | 33.67 | 10.86% | 0.60% | 18.85% | 29.60% | |
69 Neutral | C$13.51B | 30.82 | 15.28% | 0.67% | 11.73% | 41.17% | |
65 Neutral | C$2.10B | 29.89 | 24.10% | 0.99% | 13.02% | 52.88% | |
64 Neutral | C$2.18B | 33.32 | 21.42% | 2.88% | 6.26% | 0.52% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
TSE:ARE
Aecon Group Inc.
41.79
25.32
153.80%
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Aecon Group Inc. Corporate Events
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...
Financial Disclosures
Aecon Sets March 2026 Date for Q4 and Year-End 2025 Results and Investor Call
Neutral
Jan 8, 2026
Aecon Group Inc. has scheduled the release of its fourth quarter and full-year 2025 financial results for March 5, 2026, after the market close, followed by a live webcast and conference call on March 6, 2026. The company will also provide an acco...
Business Operations and StrategyM&A Transactions
Aecon Utilities Closes Acquisition of High-Voltage Specialist KPC to Boost Grid Modernization Play
Positive
Jan 6, 2026
Aecon Group Inc.’s utilities subsidiary has closed the acquisition of KPC, an Ontario-based contractor specializing in high-voltage testing, commissioning and energy metering solutions, bolstering Aecon Utilities’ technical capabilitie...
Dividends
Aecon Group Inc. Declares Quarterly Dividend
Positive
Dec 15, 2025
Aecon Group Inc. announced that its Board of Directors has approved a quarterly dividend of 19 cents per share, payable on January 5, 2026, to shareholders of record as of December 24, 2025. This decision reflects Aecon’s ongoing commitment ...
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.