National Bank has once again reaffirmed its bullish stance on North American Construction Group Ltd. (NYSE: NOA; TSX: NOA), with analyst Maxim Sytchev maintaining a Buy rating and a C$28.00 price target. The reaffirmation comes as the company’s shares opened at $12.80 today, underscoring what analysts see as a significant discount compared to its long-term potential.
Sytchev, who is recognized as a 5-star analyst by TipRanks, holds a strong track record with an 18.9% average return and a 68.25% success rate. He primarily covers the Industrials sector, analyzing companies such as Stantec, ATS Corporation, and AtkinsRealis, and his confidence in NOA signals strength in the construction and heavy equipment services market.
According to TipRanks, “Sytchev is a 5-star analyst with an average return of 18.9% and a 68.25% success rate.”
The positive outlook is not limited to National Bank. The broader Wall Street consensus leans Moderate Buy, with analysts collectively setting an average price target of $18.25—representing a potential 42.58% upside from current levels. In a parallel research note, BMO Capital reiterated its Buy rating on NOA, assigning a C$27.00 target, further supporting confidence in the company’s trajectory.
North American Construction Group’s most recent earnings report, for the quarter ending March 31, reflected mixed results. The company posted quarterly revenue of $340.83 million, a substantial increase compared to $297.03 million in the same quarter last year. However, net profit fell to $6.16 million from $11.37 million the prior year, signaling higher operating expenses and margin pressures.
Despite the dip in profit, analysts remain focused on the positive revenue trajectory, viewing it as evidence of strong project demand and the company’s ability to capture large-scale contracts.
Founded in 1953 and headquartered in Acheson, Alberta, North American Construction Group is among Canada’s largest providers of mining and heavy civil construction services. The company specializes in earthworks, mine site development, tailings management, and contract mining, with a strong footprint in the oil sands sector.
The company has expanded its equipment fleet in recent years, making it one of the most comprehensive providers of earthmoving services in Western Canada. NOA’s ability to handle large, complex projects positions it well to secure long-term contracts from oil, gas, and resource development companies.
The outlook for NOA is closely tied to the performance of the energy and natural resources sectors. With global energy demand remaining high and infrastructure spending increasing, demand for heavy construction services is expected to remain resilient. The oil sands, in particular, represent one of the largest ongoing industrial developments in Canada, providing steady contract opportunities for NOA.
Industry analysts point out that while commodity price volatility and rising input costs could pose challenges, the company’s established reputation and long-standing partnerships with major producers act as competitive advantages.
Looking ahead, investors are watching to see whether North American Construction Group can translate revenue growth into higher profitability in the coming quarters. Operational efficiency, cost control, and fleet utilization rates will be key factors.
Still, analysts remain optimistic. The reaffirmed Buy ratings from National Bank and BMO Capital reflect confidence that NOA’s market share, backlog of projects, and exposure to the energy sector provide a strong foundation for future growth.
With shares trading well below analyst targets, the company presents an attractive opportunity for investors seeking exposure to the industrials and infrastructure sectors.
Originally reported by Tipranks in The Globe And Mail.
.webp)
