WEBULL

Assessing Stella-Jones (TSX:SJ) Valuation As Infrastructure Demand And Acquisition Plans Support Growth Narrative

Simply Wall St · 2d ago

Recent commentary around Stella-Jones (TSX:SJ) has focused on ongoing demand for its utility poles and railway ties, linked to grid resiliency and rail maintenance programs, alongside plans to keep pursuing acquisitions across North America.

See our latest analysis for Stella-Jones.

Those infrastructure themes have coincided with a solid run in the shares, with Stella-Jones trading at $89.43 after a 90-day share price return of 10.07% and a 1-year total shareholder return of 26.54%. This suggests momentum has been building over both shorter and longer horizons.

If you are curious about other infrastructure linked names and supply chain plays, this could be a good moment to broaden your search with auto manufacturers.

With Stella-Jones trading near its recent highs, a 27.26% intrinsic discount estimate and only a 6.23% gap to the average analyst target raise a key question for you: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 5.9% Undervalued

With Stella-Jones last closing at CA$89.43 against a narrative fair value of CA$95, the valuation case hinges on how its infrastructure exposure plays out.

The North American infrastructure renewal cycle and grid modernization efforts are expected to drive sustained long-term demand for utility poles and transmission structures. These are core offerings for Stella-Jones and are viewed as supporting reliable revenue growth and resilient order books.

Aging infrastructure in both the U.S. and Canada is associated with ongoing replacement needs for utility poles and railway ties. Management has repeatedly highlighted a visible, improving volume trend well into 2026, which they indicate could support stable or growing sales even if there is short-term softness.

Read the complete narrative.

Want to see what is behind that confidence in long run orders and earnings? Revenue growth assumptions, margin shifts and a higher future earnings multiple all sit at the core of this valuation story.

Result: Fair Value of $95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still key watchpoints, including a possible long run shift toward steel or composite poles, as well as tighter environmental rules that could pressure wood based margins.

Find out about the key risks to this Stella-Jones narrative.

Build Your Own Stella-Jones Narrative

If this narrative does not fully match your view, you can review the numbers yourself and shape a version that fits your thesis with Do it your way.

A great starting point for your Stella-Jones research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If you are serious about building a stronger portfolio, now is the time to widen your watchlist and size up fresh opportunities before other investors do.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.