The Materials sector company, Stantec (TSX: STN), has received a rating update from a Wall Street analyst today. Yuri Lynk, an analyst with Canaccord Genuity, has upgraded their rating on STN to Buy , with a C$37 price target.
Lynk noted:
“We are upgrading Stantec to BUY from HOLD and increasing our target price to C$37.00 from C$34.00. With both organic net revenue growth and EBITDA margin on the rise within the core consulting business, we believe the company is close to turning the corner. The Construction segment had another terrible quarter due to ongoing execution issues. However, investors sold the stock down only 1.9% in reaction to this, indicating just how low expectations have fallen for this company. We see good growth going forward and the troubled projects are essentially complete, reducing the risk of another large write-down. The planned sale of this business could serve as a catalyst. Investment highlights Stantec reported Q2/2018 EBITDA of C$94 million, well below our C$101 million estimate and the FactSet consensus of C$107 million.”
According to TipRanks.com, Lynk is ranked #508 out of 4850 analysts.
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The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Stantec with a C$37.80 average price target, implying a 14.9% upside from current levels. In a report released yesterday, BMO Capital also reiterated a Buy rating on the stock with a C$40 price target.
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Stantec’s market cap is currently C$3.75B and has a P/E ratio of 19.8. The company has a Price to Book ratio of 1.93.
Stantec, Inc. engages in general design and architectural solutions. It specializes in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, construction services, project management, and project economics, from initial project concept and planning through to design, construction, commissioning, maintenance, decommissioning, and remediation. It operates through the following segments: Buildings; Energy and Resources; Environment Services; Infrastructure; and Water. The Buildings segment offers e-design, design, and construction administration services in planning, architecture, buildings engineering, and interior design services for vertical infrastructure. The Energy and Resources segment is involved in industrial engineering, project management, and construction management services primarily for private sector clients. The Environment Services segment provides environmental services for private sector clients and remediation activities for private and public sector clients. The Infrastructure segment is responsible to design and engineering services; as well as project and construction management services. The Water segment is responsible for design and engineering and construction management services in water projects. The company was founded in 1954 and is headquartered in Edmonton, Canada.
The company’s shares closed on Wednesday at C$32.89.
