CIBC Capital Markets reiterated in neutral rating on the shares of North American Construction Group (NOA.TO)' while raising it price target to C$23.00 from C$20.00, saying 2026 is off to a good start with its bid pipeline looking robust.
After a deeper review of NACG's first-quarter results, CIBC is now more constructive on the company's business outlook given management's increased emphasis on execution.
While Canadian margins remain below historical levels, CIBC increased its oil sands revenue estimates for 2027 given tailwinds in commodity prices and a large potential tender cycle in the first quarter of that year.
The increased price target reflects a higher EBITDA estimate in 2026 on the back of this update. The higher estimate, meanwhile, reflects renewed confidence in forward guidance.
CIBC estimates $399 million adjusted EBITDA for the year, which is at the midpoint of $380 million to $420 million EBITDA guidance. Free cash flow estimate was raised by 2%, from $111 million to $114 million.
CIBC described NAGC's bid pipeline as intriguing, with meaningful award volume expected for the first quarter of 2027.
Price: $20.59, Change: $-0.43, Percent Change: -2.05%