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ATCO Ltd Cl I NV
(TSX:ACO.X)
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Rating:61Neutral
Price Target:
C$85.00
▲(11.93% Upside)
Action:Reiterated
Date:10/07/26
The score is anchored by stable operating performance and cash generation but held back by elevated leverage and weaker ROE/net margin conversion. Technicals are supportive with price above major moving averages, while valuation is a notable headwind due to the high P/E despite a moderate dividend yield. The latest earnings call was broadly positive on growth, backlog/contract momentum, and cash flow, tempered by timing uncertainty on large multi-year opportunities.
Positive Factors
Recurring regulated and contracted infrastructure revenues
Regulated utilities and contracted infrastructure services provide recurring revenue supported by rate frameworks, customer relationships and long-term arrangements. This business mix can improve earnings visibility and resilience while supporting continued investment across ATCO’s diversified operating platform.
Negative Factors
High leverage limits financial flexibility
Elevated leverage remains a structural constraint for ATCO, limiting balance-sheet flexibility even within a utilities-oriented business. High debt relative to equity can restrict the company’s ability to fund expansion, absorb operating setbacks or pursue opportunities without increasing financial risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring regulated and contracted infrastructure revenues
Regulated utilities and contracted infrastructure services provide recurring revenue supported by rate frameworks, customer relationships and long-term arrangements. This business mix can improve earnings visibility and resilience while supporting continued investment across ATCO’s diversified operating platform.
Read all positive factors
ATCO Ltd Cl I NV (ACO.X) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$8.25B
Dividend Yield2.53%
Average Volume (3M)380.18K
Price to Earnings (P/E)50.4
Beta (1Y)>-0.01
Revenue Growth4.81%
EPS Growth-58.62%
CountryCA
Employees20,369
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)1.62
Shares Outstanding100,966,920
10 Day Avg. Volume406,495
30 Day Avg. Volume380,183
Financial Highlights & Ratios
PEG Ratio-0.65
Price to Book (P/B)1.40
Price to Sales (P/S)1.23
P/FCF Ratio27.89
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$89.71Price Target Upside18.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)4.84
Revenue Forecast (FY)C$5.86B
ATCO Ltd Cl I NV Business Overview & Revenue Model
Company Description
ATCO Ltd. engages in the structures and logistics, utilities and ports & transportation logistics business. It operates through the following segments: Structures & Logistics, Electricity, Pipelines & Liquids, Neltume Ports and Corporate & Other. ...
How the Company Makes Money
ATCO makes money primarily by operating regulated and contracted infrastructure and service businesses that generate recurring revenue. Key revenue streams include: (1) Regulated utilities: revenue earned from distributing natural gas and electric...
ATCO Ltd Cl I NV Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 06, 2026
Earnings Call Sentiment Positive
The call emphasized multiple clear operational and financial positives: double‑digit adjusted earnings growth company‑wide (13% YoY), strong Structures performance with 16 consecutive quarters of YoY growth, higher rental rates (10% YoY), improved cash flow (≈70% YoY increase), expanding backlog and converted LNTPs, and strengthened manufacturing and fleet capacity. Headwinds are primarily timing and execution risks tied to large, multi‑year government defense and northern projects (early stages with some RFP delays), elevated U.S. M&A valuations, and a few clarity items on backlog composition. On balance the call conveyed constructive momentum and demonstrable near‑term wins with manageable medium‑term execution/timing risks.Positive Updates
Company-wide Adjusted Earnings Growth
ATCO reported adjusted earnings of $114 million ($1.01 per share) in Q2 FY2026, up 13% year‑over‑year, driven by strength in Structures and utilities.
Negative Updates
Timing and Uncertainty of Large Defense Opportunities
Defense infrastructure spending announcements (e.g., $32 billion over 10 years, $2.7 billion for support sites, and referenced ~$80 billion in related spending) present long‑term opportunities, but contracting remains in early stages and several RFPs/deliveries have been delayed, creating timing uncertainty for near‑term revenue recognition.
Read all updates
Q2-2026 Updates
Positive
Negative
Company-wide Adjusted Earnings Growth
ATCO reported adjusted earnings of $114 million ($1.01 per share) in Q2 FY2026, up 13% year‑over‑year, driven by strength in Structures and utilities.
Read all positive updates
Company Guidance
The call guided to continued, consistent earnings growth with specific metrics: ATCO reported Q2 adjusted earnings of $114 million (US? CAD assumed) or $1.01 per share, up 13% year‑over‑year; ATCO Structures delivered $36 million of adjusted earnings (16th consecutive quarter of YoY growth) with adjusted EBITDA of $82 million (+17% YoY) and average global space rental rates of $896/month (+10% YoY); Utilities delivered $74 million of adjusted earnings (up $11M YoY) while Structures & Logistics contributed $35 million (up $3M YoY). Operational and backlog metrics included standalone operating cash flow of $122 million (almost +70% YoY), secured contracts this quarter of $89M in Canada (365 modular units), $23M in the U.S. (250 units) and $57M in Australia (160 units), an additional $80M of notices of award/LNTPs this quarter (following ~$100M previously), a fleet of ~27,000 units (from ~13,000 in 2007), 13 global manufacturing facilities (Canada up from 1 to 5), completed Phase 1 manufacturing for the Stibnite Gold Project with first handover expected late Q4 2026, backlogs into late‑2026/2027, and exposure to large public opportunities (Yellowhead ~$2.9B representing ~one‑quarter of CU backlog; government defense-related announcements cited ~$32B of upgrades over 10 years plus $2.7B for support hubs and broadly ~ $80B of related defense infrastructure spending), though contracting remains early and some RFP timing is delayed.ATCO Ltd Cl I NV Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
46
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.32B | 5.14B | 4.94B | 4.74B | 4.98B | 4.29B |
| Gross Profit | 1.38B | 1.34B | 3.11B | 3.03B | 3.12B | 2.72B |
| EBITDA | 2.34B | 2.33B | 2.02B | 2.03B | 2.10B | 1.68B |
| Net Income | 182.00M | 150.00M | 430.00M | 432.00M | 370.00M | 246.00M |
Balance Sheet | ||||||
| Total Assets | 27.96B | 27.67B | 26.72B | 25.36B | 24.14B | 23.00B |
| Cash, Cash Equivalents and Short-Term Investments | 985.00M | 1.36B | 713.00M | 592.00M | 1.03B | 1.09B |
| Total Debt | 12.99B | 13.38B | 11.98B | 11.17B | 10.20B | 10.15B |
| Total Liabilities | 19.28B | 19.32B | 18.01B | 16.86B | 15.79B | 15.05B |
| Stockholders Equity | 4.75B | 4.52B | 4.63B | 4.42B | 4.38B | 4.11B |
Cash Flow | ||||||
| Free Cash Flow | 372.00M | 227.00M | -27.00M | 57.00M | 535.00M | 263.00M |
| Operating Cash Flow | 2.04B | 1.93B | 1.66B | 1.48B | 1.97B | 1.46B |
| Investing Cash Flow | -1.90B | -1.90B | -1.80B | -2.58B | -1.50B | -1.38B |
| Financing Cash Flow | 279.00M | 846.00M | -55.00M | 362.00M | -527.00M | -85.00M |
ATCO Ltd Cl I NV Technical Analysis
Positive
75.94
Price Trends
75.56
Positive
75.01
Positive
69.68
Positive
Market Momentum
1.84
Negative
66.24
Neutral
89.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACO.X, the sentiment is Positive. The current price of 75.94 is below the 20-day moving average (MA) of 78.63, above the 50-day MA of 75.56, and above the 200-day MA of 69.68, indicating a bullish trend. The MACD of 1.84 indicates Negative momentum. The RSI at 66.24 is Neutral, neither overbought nor oversold. The STOCH value of 89.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ACO.X.
ATCO Ltd Cl I NV Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
61 Neutral | C$8.25B | 50.41 | 3.90% | 2.53% | 4.81% | -58.62% | |
59 Neutral | C$13.66B | 313.56 | 1.88% | 3.68% | 1.16% | -89.49% | |
58 Neutral | C$9.84B | 117.13 | 2.31% | 4.44% | 28.71% | -83.38% | |
49 Neutral | C$5.74B | 29.24 | 3.20% | 4.84% | 5.62% | ― | |
48 Neutral | C$5.79B | -71.39 | -1.50% | 1.48% | -9.61% | 54.17% | |
41 Neutral | C$7.02B | -13.15 | 25.58% | 4.79% | 0.27% | 69.31% |
* Utilities Sector Average
TSE:ACO.X
ATCO Ltd Cl I NV
81.67
30.89
60.82%
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ATCO Ltd Cl I NV Corporate Events
Business Operations and StrategyProduct-Related Announcements
QScreen AI Unveils Tiered Screening Platform to Drive U.S. Institutional Expansion
Positive
Jul 20, 2026
QScreen AI Inc. has completed a tiered screening architecture at the core of its browser-based readiness and impairment platform, converting its recently patented single-camera method into a deployable institutional product. The system uses a rapi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.