ATS Corp Is A Buy, This Analyst Says

Stifel analyst Justin Keywood on Oct. 8 maintained his Buy rating and C$52.00 objective worth on ATS Firm (ATS Firm Stock Quote, Chart, Info, Analysts, Financials TSX:ATS), citing sturdy life sciences momentum, enhancing leverage, and a supportive valuation backdrop following SoftBank’s acquisition of Switzerland-based experience agency ABB’s robotics division.

SoftBank’s purchase of ABB’s robotics unit at 2.4× product sales and 17.2× EBITDA highlights the value being positioned on automation belongings tied to AI-driven manufacturing.

Keywood acknowledged the transaction underscores “bigger valuation potential for ATS,” which trades at solely 12× NTM EBITDA amid what he described as {an electrical} car “unwind, a CEO transition, and elevated leverage of roughly 3.5×.”

He acknowledged life sciences outcomes should inflect in fiscal Q2, reported in November, with consolidated product sales anticipated to rise 17% year-over-year as quick deleveraging continues.

Cambridge-based ATS designs and builds manufacturing unit automation strategies, with better than 60% of earnings tied to life sciences prospects. The company integrates proprietary robotics and strategies with digital suppliers and supplier parts, specializing in superior automation traces utilized in diagnostics, medical experience, and pharmaceutical manufacturing.

Keywood acknowledged that plenty of ATS purchasers have devoted better than US$350-billion in U.S. manufacturing investments this 12 months, supporting sustained automation demand. He expects life sciences product sales to develop organically at a low- to mid-teens worth over the next 12 months, with consolidated margins rising 50–80 basis components as the mixture shifts in the direction of higher-margin segments.

Roughly 10% of ATS’s newest product sales are derived from automation traces for GLP-1 auto-injectors. Whereas consumers have expressed concern following optimistic oral-GLP-1 trial outcomes, Keywood acknowledged new indications previous weight issues and regulatory approvals for treating MASH (Metabolic dysfunction-Associated SteatoHepatitis) will broaden demand.

He added that the company’s radiopharma unit continues to realize traction and is anticipated to outpace GLP-1 growth inside the coming quarters.

EV-related earnings is now safe at 7–10% of product sales after falling from over 30% two years up to now. Keywood acknowledged that the part’s unwind and a negotiated A/R settlement had rapidly lifted leverage, nevertheless he expects net-debt-to-EBITDA to fall from 3.5× to a few.0× inside three quarters. He moreover well-known that the shock CEO change in July has had little operational impression, given the company’s decentralized development and expert administration bench.

Keywood acknowledged valuation stays engaging, with ATS shopping for and promoting at 12× NTM EBITDA in distinction with automation buddies averaging 16×. His DCF analysis implies truthful price “inside the C$50s,” supported by upcoming growth quarters, margin enlargement, and potential tuck-in acquisitions.

He acknowledged ATS generated C$369-million in Adjusted EBITDA on C$2.68-billion in earnings in fiscal 2025 and expects these figures to reinforce to C$408-million and C$2.95-billion, respectively, in fiscal 2026.

 

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