Stantec (STN) shares plummeted 5.02% in Monday's trading session, despite Stifel Canada reiterating its buy rating on the engineering and design company. The stock's sharp decline comes as a surprise given the positive analyst outlook and solid third-quarter results.

Stifel analyst Ian Gillies maintained a buy rating on Stantec but lowered the price target to C$169.00 from C$175.00. Gillies noted that Stantec's Q3 2025 performance was "solid" and considered it the strongest among the three engineering firms covered by Stifel. The analyst's investment thesis remains unchanged, highlighting mid-single-digit organic growth rates and an active M&A program expected to resume in the coming months.

Despite the positive assessment, investors appear to be focusing on the reduced price target and potential concerns about future earnings. Stifel's report mentioned that while revenue and EBITDA estimates underwent only modest changes, EPS projections were negatively impacted by higher lease depreciation expenses. The market's reaction suggests that investors may be reassessing Stantec's valuation in light of these factors, despite the company's strong fundamental performance and positive analyst sentiment.