ATS stock rating upgraded by Scotiabank on nuclear backlog growth

Investing.com - ATS Corporation (TSX:ATS) (NYSE:ATS) stock rating was upgraded by Scotiabank from Sector Perform to Sector Outperform with a price target increase to C$49.00 from C$45.00. The stock is currently trading at $29.56, having posted an impressive 11% gain over the past week.

The upgrade comes as ATS’s nuclear backlog reached $275 million, representing 13% of the company’s total backlog and more than double the $110 million level from a year ago.

Scotiabank noted that ATS has two built-in catalysts: an upcoming CEO announcement and expected deleveraging below 3x by fiscal year-end, while estimates and valuation appear appropriately reset. InvestingPro data shows the company’s liquid assets exceed short-term obligations with a current ratio of 1.62, supporting the deleveraging narrative.

Despite Thursday’s stock movement, Scotiabank pointed out that ATS shares have still underperformed the TSX by nearly 30% and are trading below levels seen when the company announced its EV settlement. While the stock has gained 16.1% over the past six months, it remains down 3.02% year-to-date. According to InvestingPro analysis, ATS appears to be trading above its Fair Value, suggesting investors should carefully consider entry points.

Management indicated that the nuclear project pipeline continues to diversify beyond refurbishment to include service and new nuclear reactor builds, including small modular reactors (SMRs). While ATS has not been profitable over the last twelve months, InvestingPro Tips indicate that analysts expect the company to be profitable this year with net income growth. Discover 5+ additional InvestingPro Tips and access the comprehensive Pro Research Report covering ATS among 1,400+ US equities for deeper insights into the company’s financial health.

In other recent news, ATS Corporation reported impressive financial results for Q2 2025, showcasing a substantial increase in revenue and improved operational performance. The company’s revenues reached $729 million, representing a 19% year-over-year growth, with an organic growth rate of 12.6%. Adjusted earnings per share were reported at $0.45, highlighting strong operational efficiency. These developments reflect positively on the company’s recent performance. The earnings announcement did not significantly impact the stock, which saw a minor decline in value. ATS Corporation’s financial health appears robust, as indicated by these figures. Investors may find these results encouraging as they consider future opportunities with the company.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.