WEBULL

Aecon Group (TSX:ARE) As Major Project Wins Feed A Backlog Led Valuation Case

Simply Wall St · 1d ago

Aecon Group (TSX:ARE) has drawn fresh attention after its joint ventures secured an approximately CA$815 million biosolids facilities contract in Winnipeg, as well as preferred proponent status on the Roberts Bank Terminal 2 project in British Columbia.

See our latest analysis for Aecon Group.

The recent contract wins appear to have come alongside strong share price momentum, with Aecon Group’s share price return of 23.38% over the past 30 days and 71.10% year to date. Its 1 year total shareholder return of 180.55% and 3 year total shareholder return of almost 4x suggest investors have already priced in a significant shift in expectations.

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Aecon Group now trades only slightly below the average analyst price target, even after a very sharp run. Is that a sign the market is still too cautious, or that recent contract news is already fully reflected?

Most Popular Narrative: 13% Undervalued

Aecon Group’s most followed narrative pegs fair value around CA$62, compared with the last close at CA$53.93, framing the recent contract news within a richer long term earnings story.

Record reported backlog of $10.7b and $9.5b of new awards in 2025, heavily tied to power generation, nuclear, utilities and mass transit, gives multi year visibility on activity levels that can support revenue and earnings durability.

Read the complete narrative.

Curious what earnings profile needs to sit behind that CA$62 figure? The narrative leans on faster top line growth, fatter margins and a higher future earnings multiple. The mix matters as much as the headline backlog. The full story spells out how these pieces are expected to work together.

Result: Fair Value of CA$62 (UNDERVALUED)

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

However, Aecon Group still faces execution risk on large nuclear, defense, and legacy fixed price projects, where cost overruns or delays could undermine the bullish earnings path.

Find out about the key risks to this Aecon Group narrative.

Another View: Multiples Paint a Tougher Picture for Aecon Group

The bullish narrative suggests Aecon Group is 13% undervalued, but the market is currently paying a P/E of 105.1x, compared with 39.1x for the wider North American Construction industry and 38.5x for peers. The fair ratio sits at 53.3x, so are expectations running too hot here?

See what the numbers say about this price — find out in our valuation breakdown.

TSX:ARE P/E Ratio as at Jul 2026
TSX:ARE P/E Ratio as at Jul 2026

Next Steps

With sentiment running hot on Aecon Group, it makes sense to check the underlying data yourself and act quickly to shape your own view using 2 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Aecon Group?

If Aecon Group has caught your attention, use that momentum and broaden your watchlist with a few more targeted ideas before the next move passes you by.

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.