On Thursday, BMO Capital adjusted its outlook on North American Construction Group Ltd. (NYSE:NOA:CN) (NYSE: NOA), reducing the stock price target to Cdn$37.00 from the previous Cdn$39.00. Despite the price target adjustment, the firm maintained its Outperform rating on the stock.
The revision followed the company's first-quarter results for 2024, which met analyst expectations. The performance exhibited weaker results in the Canadian market, which were balanced by robust operations in Australia.
The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) guidance for the year 2024 remained unchanged, with projections in the range of $430 to $470 million. North American Construction anticipates a nearly 45%/55% split in earnings between the first and second halves of the year.
Post the quarterly report, BMO Capital revised its stock price target, basing the new target on approximately 3.5 times the expected EV/EBITDA for the year 2025. The firm also noted that it is positioned at the lower end of the company's 2024 EBITDA guidance. The analyst expressed confidence that improvements in the company's performance are likely to be seen in the Canadian market going forward.
North American Construction Group Ltd. has not commented on the revised stock price target. The company's stock performance and investor sentiment will continue to be influenced by its operational results and the execution of its strategic plans in both the Canadian and Australian markets.
InvestingPro Insights
As North American Construction Group Ltd. (NYSE: NOA) navigates through market fluctuations and operational challenges, real-time data from InvestingPro provides a comprehensive picture of the company's financial health.
With a market capitalization of $548.03 million and a P/E ratio that has adjusted to 12.64 in the last twelve months as of Q1 2024, the company demonstrates a valuation that could attract investors looking for stability. Notably, the company's revenue growth of 20.89% in the same period underscores its capacity to expand its financial base amidst challenging market conditions.
InvestingPro Tips reveal that analysts have a positive outlook on the company's profitability, with three analysts revising their earnings upwards for the upcoming period. This optimism is further supported by the company's track record of maintaining dividend payments for 11 consecutive years, offering a dividend yield of 1.4% as of the latest data. Moreover, the stock generally trades with low price volatility, which may appeal to investors seeking lower-risk equity investments.
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