Shares of construction and infrastructure development company Aecon Group (TSE:ARE) fell 12% in Thursday’s trading after it revealed it was having difficulties with four large fixed-price legacy projects. The Canada-based company said the projects were being carried out by joint ventures in which it is a partner.
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The firm, in its Q3 reports, noted that the legacy projects impacted its operational losses. Notably, it reported a $91.1 million loss, a significant increase compared to the $30.1 million operating losses reported in the same quarter last year.
Meanwhile, Aecon reported a $133.4 million profit in its Q3, up from a previous $34.5 million last year. Likewise, earnings for the quarter also rose to $1.63 from the $0.45 recorded in the same period last year. The company attributed the boom to the sale of its 49% stake in Bermuda Skyport Corp for $162.3 million in cash.
Third-quarter sales were $1.24 billion, compared to $1.32 billion at the same time in 2022. However, analysts noted potential headwinds in some of the company’s infrastructure projects. The analysts raised caution on the Eglinton Crosstown light-rail transit system in Toronto and the Gordie Howe bridge being built between Detroit and Windsor, Ontario.
Is Aecon a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ARE stock based on three Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average ARE price target of C$13.50 per share implies a 47.86% upside potential.
