Yahoo Finance AtkinsRéalis to cash in on nuclear 'super cycle'; analysts boost price targets
Canadian engineering firm AtkinsRéalis Group (ATRL.TO) is winning praise from stock analysts following an investor day where the company, formerly known as SNC Lavalin, laid out a plan to cash in on a nuclear “super cycle.”
On Thursday, AtkinsRéalis executives said annual revenue from the company’s nuclear division is expected to roughly double from about $1 billion in 2023 to between $1.8 billion and $2 billion by 2027. The Montreal-based firm makes the bulk of its money from its engineering services business, which brought in $5.9 billion last year.
Toronto-listed shares climbed about two per cent in early trading on Friday.
RBC Capital Markets analyst Sabahat Khan boosted his price target by $4 per share to $69 on Friday morning, maintaining an “outperformer” rating. Jacob Bout at CIBC Capital Markets raised his target to $68 per share from $64, while also keeping an “outperformer” rating.
A combination of rising concerns about energy security, growing urgency to address climate change, and expectations for surging electricity demand has worked in favour of nuclear energy. Uranium prices have soared as producers predict many years of tight supply for nuclear fuel.
“The recent ‘rethink’ on nuclear energy, driven by net-zero targets and energy security concerns, has led to a renewed focus on new builds, and we believe AtkinsRéalis is well-positioned to play a meaningful role in this new era going forward,” RBC’s Khan wrote in a note to clients.
AtkinsRéalis provides new-build and full refurbishment services of CANDU reactors. Canada is home to 19 of the 27 units in operation today. The company is currently refurbishing units at Ontario's Bruce and Darlington nuclear generating stations, as well as a unit in Romania.
According to the World Nuclear Association, about 15 per cent of Canada’s electricity comes from nuclear power.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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