STA Research Assigns a Hold rating for Aecon Group Inc. (ARE:TSX)

Aecon Group Inc. Stock Forecast:

According to the predictions of eight analysts, Aecon Group Inc. is expected to have an average analyst target price of CAD 10.91 in the next 12 months. The consensus among analysts is to “Hold” the stock. Stock Target Advisor‘s own analysis of the stock is “Slightly Bearish,” based on a mix of 5 positive signals and 7 negative signals. As of the last trading day, Aecon Group Inc.’s stock price was CAD 10.99, which represents an increase of 3.58% over the past week and 1.76% over the past month, but a decrease of 36.51% over the last year.

Analysts Coverage Change:

  • TD Securities maintains a “Hold” rating for Aecon Group Inc. and raises the target price to $12.5 from $10.
  • STA Research assigns a “Hold” rating for Aecon Group Inc.
  • ATB Capital Markets maintains a  “Buy” rating and raises the target price to $16 from $14.

Aecon Group Inc. News:

Construction company Aecon Group Inc. has agreed to sell its road-building business in Ontario to Green Infrastructure Partners Inc. for $235 million in cash. The sale includes Aecon Transportation East, which builds roads across Ontario for the provincial government, municipalities, and private clients. ATE has around 1,000 employees who will now be transferred to GIP.

Following the sale, Aecon plans to sign a strategic co-operation agreement with GIP. The net proceeds from the sale will be used to pay down debt, according to Aecon CEO Jean-Louis Servranckx. The sale is consistent with the company’s goal of targeting prudent balance sheet leverage and liquidity, he said, and reduces the overall capital intensity of Aecon’s business.

For GIP, the acquisition of ATE represents a significant expansion of its infrastructure investment portfolio. The company’s focus is on sustainable infrastructure, with a particular emphasis on the energy transition. The addition of ATE to its portfolio represents an opportunity to diversify and expand its investments while contributing to the ongoing development of Ontario’s road network.

The deal is subject to customary closing conditions and is expected to be completed in the first half of 2023.

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