On Wednesday, BMO Capital Markets updated its outlook on Stantec Inc . (NYSE: NYSE:STN), raising the firm’s price target on the stock to $145 from the previous target of $138, while reiterating an Outperform rating. The adjustment follows a strong performance by the company in 2024, with expectations for continued momentum into 2025. The stock has shown impressive momentum, gaining 7.17% in the past week and trading near its 52-week high of $88.42. According to InvestingPro data, the company maintains strong gross profit margins of 54.47% and has achieved 15.8% revenue growth in the last twelve months.
According to BMO Capital Markets, Stantec (TSX:STN) concluded 2024 on a robust note, and this vigor is anticipated to extend into the current year. The analysts at BMO believe there is a greater likelihood for Stantec to surpass their financial projections, citing potential growth in the company’s base operations and through strategic mergers and acquisitions. InvestingPro analysis shows the company maintains a GOOD financial health score, with 12+ additional exclusive insights available to subscribers.
Despite a 10% increase in Stantec’s share price today, BMO analysts suggest that the valuation gap between Stantec and its peer WSP Global Inc. remains wide. The raised price target to $145 is attributed to upward revisions in estimates and the forward-rolling of BMO’s valuation base year. With a current P/E ratio of 39.01 and a market capitalization of $9.54 billion, investors seeking detailed valuation analysis can access comprehensive metrics through InvestingPro’s exclusive research reports.
The BMO analyst expressed confidence in the company’s prospects, stating, "Momentum Expected to Carry Over Into 2025; In our view, STN had a strong finish in 2024 and the momentum is expected to carry over into 2025. We believe the risk to our estimates is weighted to the upside, with opportunities to exceed our projections in the base business, as well as through M&A."
This bullish stance on Stantec is reinforced by the belief that the company’s performance could outdo expectations, which may lead to a positive reassessment of the stock by investors and analysts alike.
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