The Globe and Mail reports in its Wednesday, Oct. 28, edition that Canaccord Genuity analyst Yuri Lynk continues to "see a favourably skewed risk/reward opportunity" at SNC-Lavalin Group, leading him to reaffirm his "buy" rating. The Globe's David Leeder writes that Mr. Lynk elevated his share target to $40 from $38. Analysts on average target the shares at $34. Mr. Lynk says in a note: "Similar to prior quarters, we expect solid results from SNCL Engineering Services and see downside risk associated with the lump-sum turnkey (LSTK) business, SNCL Projects, which is being wound down. We expect SNCL Engineering services to deliver $140-million in EBIT versus $176-million in Q3/2019 on a 2-per-cent year-over-year decline in revenue. Q3/2019 featured an SNCL Engineering Services EBIT margin of 11.7 per cent, the highest of any quarter since Atkins was acquired in mid-2017. This was driven by unusually high Nuclear margins and one-time positive adjustments in Infra. Services. All that to say, last year's third quarter is a tough comp. ... We expect to see strong results from Infra. Services, Nuclear, and rail and transit within EDPM. We are less confident about how SNCL Projects will perform in the quarter."
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