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Aecon Group Inc.
(TSX:ARE)
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Rating:60Neutral
Price Target:
C$52.00
â–²(3.36% Upside)
Action:Reiterated
Date:08/05/26
The score is driven mainly by improving fundamentals and cash generation (strong TTM free cash flow rebound and better operating performance), reinforced by a positive earnings call with upbeat growth and margin guidance backed by a large backlog. These positives are tempered by current net losses and earnings volatility, weak near-term technical momentum, and a negative P/E that reflects ongoing profitability risk.
Positive Factors
Large backlog & award pipeline
A $10.5B backlog with meaningful new awards provides multi‑year revenue visibility and supports higher utilization of crews and equipment. This reduces near‑term bidding risk, underpins forward revenue growth and allows phased execution planning that should stabilize operating margins over time.
Negative Factors
Earnings volatility & legacy project drag
Persistent bottom‑line volatility and legacy project losses (LTM impacts) undermine earnings quality and can erode retained equity. Continued GAAP losses constrain retained capital, complicate covenant headroom and can limit the firm's ability to bid large fixed‑price projects without added contingency.
Read all positive and negative factors
Positive Factors
Negative Factors
Large backlog & award pipeline
A $10.5B backlog with meaningful new awards provides multi‑year revenue visibility and supports higher utilization of crews and equipment. This reduces near‑term bidding risk, underpins forward revenue growth and allows phased execution planning that should stabilize operating margins over time.
Read all positive factors
Aecon Group Inc. (ARE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.08B
Dividend Yield1.73%
Average Volume (3M)372.83K
Price to Earnings (P/E)―
Beta (1Y)0.58
Revenue Growth21.48%
EPS Growth-323.81%
CountryCA
Employees8,785
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)-0.91
Shares Outstanding68,529,526
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$58.29Price Target Upside15.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)1.52
Revenue Forecast (FY)C$6.35B
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 primarily makes money by contracting to plan, build, and deliver construction and infrastructure projects for public- and private-sector customers, earning revenue as work is performed under project contracts. Key revenue streams typically i...
Aecon Group Inc. Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented multiple material operational and financial positives: record quarterly revenue (+25% YoY), doubled adjusted EBITDA, a strong free cash flow turnaround, meaningful recurring revenue growth (+30% in utility recurring revenue), large and diversified backlog (~$10.5B), strategic consolidation of Aecon Utilities, and the successful completion/opening of the Gordie Howe Bridge. Offsetting items included a large non-cash fair value adjustment that generated a GAAP loss per share, a legacy-project profit drag (LTM -$36M), a modest decline in concessions EBITDA, and localized margin pressure in industrial and nuclear operations. Management emphasized improving risk profile, conservative backlog reporting, and cautious, phased execution of large collaborative projects. Overall, the positive operating momentum, cash generation improvement, and strategic moves outweigh the near-term accounting and legacy project headwinds.Positive Updates
Record Quarterly Revenue
Q2 revenue of $1.6 billion, a 25% increase year-over-year — the highest revenue in any quarter in Aecon's history; ~80% of the quarter's revenue growth was organic.
Negative Updates
Fair Value Adjustment Impacting GAAP EPS
Reported diluted loss per share of $1.58 in Q2 driven by a ~ $128 million fair value adjustment on Aecon Utilities preferred shares recorded when agreeing to the $320 million purchase, masking positive underlying operating results.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Q2 revenue of $1.6 billion, a 25% increase year-over-year — the highest revenue in any quarter in Aecon's history; ~80% of the quarter's revenue growth was organic.
Read all positive updates
Company Guidance
Management guided to double‑digit revenue growth in 2026 (with further revenue growth expected in 2027) and a stabilization then gradual improvement in Construction adjusted‑EBITDA margins in 2026, backed by a $10.5B backlog and strong recent results — Q2 revenue of $1.6B (+25% YoY), Q2 adjusted EBITDA $82M (vs $41M a year ago) and Construction adjusted EBITDA $90M (5.5% margin vs 3.1% prior year) — plus $1.3B of new awards in the quarter ($2.7B YTD), trailing‑12‑month recurring revenue >$1B (utility recurring $868M, +30% YoY), core cash of $129M, total committed credit facilities of $2.0B, net debt of $672M (net debt/LTM adjusted EBITDA 2.2x or 2.0x excluding legacy impacts), LTM free cash flow of $301M (vs -$10M prior year), the $320M preferred‑share buyout for Aecon Utilities (implying $1.2B equity value/$1.5B EV), and a quarterly dividend of $0.1925 ($0.77 annualized).Aecon Group Inc. Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
58
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.96B | 5.43B | 4.24B | 4.64B | 4.70B | 3.98B |
| Gross Profit | 445.33M | 287.64M | 182.55M | 255.63M | 355.96M | 328.12M |
| EBITDA | 244.39M | 194.35M | -65.06M | 48.40M | 129.04M | 122.05M |
| Net Income | -65.30M | 15.16M | -59.52M | 161.89M | 30.38M | 49.68M |
Balance Sheet | ||||||
| Total Assets | 4.42B | 3.99B | 3.23B | 3.20B | 3.57B | 3.29B |
| Cash, Cash Equivalents and Short-Term Investments | 629.56M | 486.02M | 438.02M | 645.78M | 485.05M | 630.69M |
| Total Debt | 804.04M | 600.70M | 464.72M | 418.19M | 909.06M | 779.63M |
| Total Liabilities | 3.45B | 3.06B | 2.26B | 2.13B | 2.61B | 2.37B |
| Stockholders Equity | 954.58M | 921.74M | 956.12M | 1.06B | 954.00M | 913.57M |
Cash Flow | ||||||
| Free Cash Flow | 283.86M | 60.05M | -23.08M | 46.41M | -142.39M | -63.65M |
| Operating Cash Flow | 369.47M | 126.62M | 28.65M | 64.93M | -109.68M | -28.27M |
| Investing Cash Flow | -217.53M | -89.92M | -180.66M | 344.90M | -36.22M | -55.76M |
| Financing Cash Flow | -6.50M | 14.54M | -58.26M | -141.91M | -11.86M | -52.28M |
Aecon Group Inc. Technical Analysis
Negative
50.31
Price Trends
47.31
Negative
47.17
Negative
40.39
Positive
Market Momentum
-0.81
Positive
40.41
Neutral
23.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ARE, the sentiment is Negative. The current price of 50.31 is above the 20-day moving average (MA) of 46.67, above the 50-day MA of 47.31, and above the 200-day MA of 40.39, indicating a neutral trend. The MACD of -0.81 indicates Positive momentum. The RSI at 40.41 is Neutral, neither overbought nor oversold. The STOCH value of 23.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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$13.80B | 32.70 | 7.89% | 0.09% | 14.82% | -82.14% | |
73 Outperform | C$11.45B | 23.00 | 15.21% | 0.99% | 9.97% | 15.80% | |
72 Outperform | C$25.64B | 27.08 | 9.52% | 0.93% | 10.24% | 14.12% | |
71 Outperform | C$3.87B | 63.89 | 11.25% | 1.19% | 7.38% | -39.80% | |
64 Neutral | C$2.86B | 28.83 | 24.14% | 0.78% | 16.24% | 10.17% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | C$3.08B | -48.67 | -6.76% | 1.52% | 21.48% | -323.81% |
* 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.