SNC-Lavalin to Build UK Rail Signaling Test Facility

SNC-Lavalin Group (SNC) has signed a 10-year agreement with U.K. rail owner and operator Network Rail in partnership with Multitel, a world leader in European train control system equipment (ETCS), to deliver and operate the U.K.’s most advanced signaling equipment test facility.

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SNC-Lavalin, one of the world’s largest engineering and construction groups, will design, implement and operate the National ETCS Test Verification, Validation and Integration Laboratory, which will help lead the deployment of ETCS and European Rail Traffic Management System across the rail network. This new facility will increase the punctuality, reliability, capacity, and security of the U.K. rail network.

SNC-Lavalin president and CEO Ian L. Edwards said, “SNC-Lavalin is proud to be working with asset owners to maintain and modernize a critical national infrastructure that is essential for economic growth and day-to-day life. This contract is in line with our forward strategy to continue growing our Engineering Services business, as our expertise in transportation allows us to meet the growing needs of our clients.

“We look forward to playing our part as the UK transforms its railways that have a rich and unique history.”

Currently housed at SNC-Lavalin’s Signalling Integration Center in South East England, the National ETCS Test Verification, Validation and Integration Laboratory will be fully operational by February 2022. (See SNC-Lavalin Group stock charts on TipRanks)

Last month, TD Securities analyst Michael Tupholme reiterated a Buy rating, and raised his price target from C$40 to C$42. This implies 12.2% upside potential.

Overall, consensus among Wall Street analysts is a Strong Buy, based on three Buys and one Hold. The average SNC-Lavalin price target of C$38.75 implies upside potential of 3.6% to current levels.