Can ATS stock bounce back?

Stifel analyst Justin Keywood maintained his “Buy” rating and $44.00 target on ATS Corporation (ATS Corporation  Stock Quote, Chart, News, Analysts, Financials TSX:ATS) ahead of its fiscal Q2 results, citing the company’s underappreciated nuclear medicine business and potential for a recovery in orders.

ATS is scheduled to report results Nov. 4.

In his Oct. 22 preview, Keywood said ATS faces near-term revenue headwinds from slowing GLP-1-related projects and the wind-down of electric vehicle programs, but believes much of that weakness is reflected in the share price. ATS shares are down about 30% year-to-date, compared with a 22% gain for automation peers.

“However, we see strong value within, including a burgeoning Nuclear Medicine segment (Comecer), paired with Nuclear Energy,” Keywood added.

The analyst noted that ATS’s combined nuclear businesses account for about 35% of backlog but only 17% of sales, providing an opportunity for growth as projects move into production. Keywood expects fiscal Q2 revenue of $687.5-million, down 6% year-over-year, and Adjusted EBITDA of $92.5-million, representing a 13.5% margin.

He expects bookings to increase 3% sequentially to $675-million from a multi-year low, while backlog is forecast to rise 6% to approximately $2.0-billion. “Although bookings/backlog levels are still relatively low, we see the sequential expansion as an important element for share price recovery,” he said.

Keywood said management may lower its fiscal 2027 revenue outlook as the company continues restructuring operations to address revenue headwinds estimated at 10% to 14%. He expects fiscal 2027 revenue to remain flat at approximately $2.97-billion, compared with consensus expectations for a 4% decline. Despite those pressures, he sees significant value in Comecer, the nuclear medicine equipment business ATS acquired in 2019. Comecer’s annual revenue has doubled over five years to more than $200-million, supported by growing demand for radiopharmaceutical treatments and diagnostic technology.

Keywood said the business is approaching another growth inflection following the July 2026 expansion of the approved patient population for Novartis’s prostate cancer treatment Pluvicto. The expansion doubled the eligible patient population and was followed in September by the approval of the first FDA-authorized glioma imaging drug.

He said commercial success in radiopharmaceuticals is accelerating investment across the pharmaceutical industry. Sales of Pluvicto and Lutathera reached approximately US$2.8-billion in 2025, up 35% year-over-year, while industry acquisitions have exceeded US$16-billion since 2024. Keywood estimates the nuclear medicine market could grow to approximately US$30-billion by 2030 from US$17-billion in 2025.

The analyst noted that Comecer supplies critical production equipment, including shielded containment chambers known as hot cells, used to handle radioactive materials.

“We spoke to an innovative radiopharmaceutical customer of ATS with very favourable feedback that conforms to ATS management’s conveyed robust outlook,” Keywood said.

Customer feedback suggests Comecer holds approximately 60% to 65% of the hot-cell market, compared with about 30% for its nearest competitor. Keywood said Comecer’s backlog is approximately $500-million, twice the size of ATS’s GLP-1-related backlog, with potential for individual orders approaching $100-million.

Keywood believes the growing nuclear business could help offset weakness elsewhere and support a higher valuation. “There is work in unearthing this value and an ongoing review could sharpen the go-forward model, but we also believe headwinds are largely priced-in for a platform automation play at only ~10x NTM EBITDA (peers, 20x+),” Keywood said.

He expects ATS to generate Adjusted EBITDA of $400.9-million on revenue of $2.97-billion in fiscal 2027, compared with Adjusted EBITDA of $413.0-million on revenue of $2.97-billion in fiscal 2026.

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