UPDATE: AltaCorp Capital Upgrades Stantec to Outperform
AltaCorp Capital raises its rating on Stantec (NYSE: STN) to Outperform from Perform and raises its price target to $33 from $31 a share as it believes the US macro picture is turning the corner.
AltaCorp Capital notes, "With industrial production chugging along, better employment figures and even the residential market scraping the bottom, we see the preconditions for turning positive on well-run cyclical companies. Stantec is an extremely well-run engineering outfit that has 40% exposure to the U.S. market. With attractive valuation (11.3x P/E on 2012 estimates), strong free cash flow (FCF yield of 9.4% now — could there be a dividend?; Figure 2), and consistent performance, we see no reason why Stantec should be trading at a discount to U.S. peers such as Tetra Tech(the latter now trading at 15.3x 2012 P/E)."
STN closed at 28.48 a share on Friday.
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