Stantec Upgraded to Strong Buy

Zacks Equity Research

Wed, Oct 9, 2013, 5:10 PM

On Oct 8, Zacks Investment Research upgraded Stantec Inc. (STN) to a Zacks #1 (Strong Buy).

Why the Upgrade?

Stantec has been witnessing rising earnings estimates since last one month on the back of strong second-quarter 2013 results. Moreover, this well-known technical services firm delivered positive earnings surprises in 3 of the last 4 quarters with an average earnings beat of 9.43%. The long-term expected earnings growth rate for this stock is currently pegged at 15.5%.

Stantec reported second-quarter 2013 (ended Jun 30) results on Aug 1. Earnings per share came in at 78 cents, surpassing the Zacks Consensus Estimate and the year-ago figure of 67 cents by 16.4%.

Earnings were primarily aided by top-line growth of 19.7% and increased activity in the company’s oil and gas, environmental services as well as transportation sectors. Moreover, Stantec has strengthened its geographic presence and quality of services by acquiring IBE Consulting Engineers Inc., Ashley-Pryce Interior Designers Inc. and civil engineering firm Roth Hill, LLC. in the second quarter. Moreover, some major contract wins boosted the company’s backlog at the end of the second quarter.

The Zacks Consensus Estimate for 2013 increased to $2.85 from $2.84 per share as one of the estimates was revised higher over the last 30 days. Additionally, for 2014, analysts raised the estimates over the same time frame, thereby lifting the Zacks Consensus Estimate to $3.22 per share from $3.21.

Other Stocks to Consider

The following business service firms are performing well and also have a favorable Zacks Rank:

Cardtronics Inc. (CATM) which has a Zacks #1 Rank (Strong Buy)
Bureau Veritas SA (BVRDF) which has a Zacks #1 Rank (Strong Buy)
Command Center, Inc. (CCNI) which has a Zacks #1 Rank (Strong Buy)

Read the Full Research Report on BVRDF
Read the Full Research Report on STN
Read the Full Research Report on CATM
Read the Full Research Report on CCNI

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Stantec Upgraded to Strong Buy

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