11:34 AM EST, 02/04/2025 (MT Newswires) -- National Bank of Canada said it believes outperform-rated WSP Global ( WSPOF ) , is likely to "convert" its EBITDA margin target of 20% to an exit one of 19% by 2027, ahead of the company's investor day, held to discuss its new three-year ambitions.

The bank believes WSP, whose price target is $286, could be 3 to 4 times larger in the U.S. while continental Europe presents virtually a start-up territory in terms of size. Due to this, National Bank believes the growth algorithm will be "highly influenced" by M&A opportunities which should become forthcoming given the company's premium valuation, ability to integrate, and very active private equity participants in the engineering consulting space before 2019, pointing to potential exits over the next 24 - 36 months.

The bank expects M&A activity in the global engineering consulting industry to pick up over the next few years despite the prospect of elevated financing costs.

"With 4 leading industry verticals in Infra, Building, Water/Environment, and Power, we believe the company's platform is highly diversified and much more robust relative to any point in its history and in the face of any dislocations (or opportunities) that could be presented," said National Bank analyst Maxim Sytchev in a note dated Feb. 3.

National Bank believes these strategic buckets - EBITDA per employee growth, organic revenue CAGR likely in mid-to-high single-digit range, steadily improving margins, further improving FCF metrics, and building on strategic advisory expertise that creates a flywheel effect/pricing upside - "should be" or will be given emphasis at the Feb. 13 investor day.

Shares of the company were last seen down $1.38 at $244.79 on the Toronto Stock Exchange.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 244.80, Change: -1.39, Percent Change: -0.56