There's been a major selloff in North American Construction Group Ltd. (TSE:NOA) shares in the week since it released its third-quarter report, with the stock down 22% to CA$13.12. Revenues came in at CA$413m, in line with estimates, while North American Construction Group reported a statutory loss of CA$0.90 per share, well short of prior analyst forecasts for a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from North American Construction Group's five analysts is for revenues of CA$1.67b in 2027. This reflects a decent 16% improvement in revenue compared to the last 12 months. North American Construction Group is also expected to turn profitable, with statutory earnings of CA$2.27 per share. In the lead-up to this report, the analysts had been modelling revenues of CA$1.67b and earnings per share (EPS) of CA$2.47 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
See our latest analysis for North American Construction Group
The average price target fell 15% to CA$21.29, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on North American Construction Group, with the most bullish analyst valuing it at CA$30.00 and the most bearish at CA$20.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that North American Construction Group's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2027 being well below the historical 17% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.9% per year. So it's pretty clear that, while North American Construction Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for North American Construction Group going out to 2028, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with North American Construction Group .
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