Aecon (ARE) added 8% on its big Q4 print, with continued nuclear momentum driving a 10% top line beat and margin improvement compounding the outperformance on the bottom line.

Those fundamental tailwinds look set to repeat, with ARE’s ~$11B backlog underpinning management’s call for Y/Y revenue growth…

… and its transition away from fixed price contracts towards more risk-mitigated structures (cost plus or unit pricing).

That should drive margin improvement as it plays out…

... prompting positive estimates revisions from the street, indicating recent multiple expansion isn’t a pure re-rate…

… but an expectation that the company can grow into its valuation.

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