ATS Corp. Buy, Sell or Hold?

Stifel analyst Justin Keywood reiterated his “Buy” rating and C$52.00 target price on ATS Corporation (ATS Stock Quote, Chart, News, Analysts, Financials TSX:ATS) in an Oct. 28 note, saying the shares present an opportunity as the company enters a “financial inflection” period supported by strong life-sciences demand and valuation catch-up potential.

Keywood said more than 60% of ATS’s revenue is tied to Life Sciences, where customers are committing major U.S. manufacturing investments, over US$350-billion year-to-date by a dozen LS companies by his count, supporting sustained automation demand. He said the LS segment remains in “strong shape,” with organic growth expected in the low-to-mid-teens over the next 12 months, offsetting softer trends in automotive and EV markets.

He recently attended the Advanced Design & Manufacturing Expo in Toronto, where industry feedback aligned with Stifel’s model: LS showing strength, food and beverage muted, automotive/EV bottoming but stabilizing, consumer products mixed, and nuclear — though niche — continuing to add value.

“There is investor hesitation with the ongoing CEO search, but we see that as an opportunity given the trajectory underway,” he added.

ATS reports fiscal Q2 results on Nov. 5. Stifel is forecasting revenue of $716.9-million, up 17% year-over-year, and Adjusted EBITDA of $100.6-million for a 14.0% margin. Keywood expects book-to-bill over 1.0x, ~20 bps sequential margin expansion, and further deleveraging as cash flow improves.

He said GLP-1-related automation, roughly 10% of recent revenue, continues to expand beyond obesity into new therapeutic indications, while oral GLP-1 formulations are unlikely to displace injectables in the near term because of lower adherence. Radiopharma is also gaining momentum and “expected to meaningfully eclipse GLP-1 growth” over time.

EV exposure is now just 7–10% of expected revenue after peaking above 30% two years ago. Keywood said the EV unwind “masked strong LS growth,” and restructuring in the division should assist in margin recovery. Leverage has fallen to 3.5x net debt/EBITDA after a US$190-million settlement was applied to debt reduction, with Stifel modelling 3.2x exiting Q2.

ATS trades at 11.4x NTM EBITDA versus automation peers at 19.0x, with recent M&A reinforcing sector valuations. SoftBank’s purchase of ABB’s robotics unit at a 17.2x EBITDA multiple “supports greater ATS valuation,” Keywood said, adding that a DCF points to share value in the low-C$50s versus the current ~$38.

Keywood said ATS should generate C$408.4-million in Adjusted EBITDA on revenue of C$2.95-billion in fiscal 2026.

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