Nuclear Fueling Earnings Growth, With Potential Upcoming Catalysts

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Nuclear Fueling Earnings Growth, With Potential Upcoming Catalysts

is tracking to exceed its 2026 revenue guidance ($2.5B). Revenue $9,668 $11,003 $12,040↑ $12,752↑

... with potential near-term catalysts. Last week, the Ontario government announced EV $15,550 $13,796 $14,461↓ $13,927↓

funding for the next round of pre-development work for the proposed Bruce C project. Adj. EBITDA $827 $1,009 $1,205↑ $1,392↑

The Monark development is progressing and management expects to have an update Consensus Estimates

from the regulator in Q3/26. Assuming there aren't any unexpected developments, 2024A 2025A 2026E 2027E

technology selection for Bruce C could occur as early as late 2026. In our view, CANDU

EPS $3.98 $4.86

is well-positioned for the Bruce C project given the other reactors operating at the site

and strong support from various governments in Canada. Valuation

2024A 2025A 2026E 2027EEngineering Services (ES) earnings were better than feared ($159M; BMOe: $151M),

but performance was mixed across the regions. The UK&I division led the way with P/Adj. EPS 37.7x 23.8x 20.7x 16.2x

strong organic growth (+10%) and good margin expansion (+50 bps). As expected, the P/CFPS 25.1x 22.2x 12.8x 11.2x

AMEA segment was challenged by weaker demand in the Middle East, which will likely EV/EBITDA 18.8x 13.7x 12.0x 10.0x

carry over into Q2. The USLA business was the laggard but an improved backlog, easing

QTR. Adj. EPS Q1 Q2 Q3 Q4

headwinds and moderating expansion costs should support better performance in the

2024A $0.38 $0.56 $0.72 $0.56coming quarters.

2025A $0.63 $0.80 $1.10 $1.00

Target price moderates to $107 (prior: $113), as a lower multiple applied to the ES

division (12.5x; prior: 14x) more than offset positive earnings revisions. 2026E $0.80a $0.94 $1.13 $1.19