WSP Global Inc. (WSP.TO), a global engineering and science-based professional services firm, and Microsoft Corp. (NASDAQ: MSFT) announced Thursday a multi-year, global strategic partnership to accelerate the digitalization of the Architecture, Engineering, and Construction (AEC) industry.

This comes after WSP late Wednesday afternoon unveiled its 2025-2027 Global Strategic Action Plan that flagged $200 million for strategic investments in research, innovation, and digital partnerships. WSP also released a 2025 financial outlook.

Today, WSP said its new 7-year partnership with Microsoft represents a potential combined financial commitment and investment exceeding $1 billion.

As part of this partnership, WSP is designating Microsoft as a preferred partner for digital and AI transformation services, including an expansion of Microsoft 365 Copilot globally.

It added Microsoft will continue to look to WSP as a preferred partner for engineering and science consultancy to meet the demand of customers worldwide.

"We are immensely proud of this partnership with Microsoft as it sets an innovation milestone for WSP and our entire industry," said Alexandre L'Heureux, President and Chief Executive Officer.\

On yesterday's news, National Bank said WSP's Strategic 2027 estimated targets and long-term objectives are "ambitious" and "the market will like them".

Bottom line for National Bank, the plan "looks on point" with long-term margin potential to get to 22.5% EBITDA margin (vs. 18.0% TTM) and 2x in terms of size looking "attractive", and "enabling further compounding".

The bank said: "While the meat of how we are going to get to the above-presented financial objectives will be discussed in much more detail tomorrow (we would mention so far the following buckets" -- targeting high growth areas such as digital, energy transition, water, advanced manufacturing, project management, advisory, mining & metals, reducing turnover rate by 150 bps, drive EBITDA margin improvements, invest $200 million in R&D, capitalize on key geographies where the company has a material presence, double the number of clients who generate more than $100 million in top line/annum, a 10% reduction in project margin erosion per annum, fully leverage the new ERP by 2027 and invest $100 million in additional systems and tools).

It added: "Tonight's targets are exactly in the ballpark of what we were hoping for when it comes to 2025E through 2027E (we believe the same would be the case for investors) while long-term objectives are even more ambitious than we would have hoped for. WSP can confidently look into the future, building on its four industry-leading pillars -- Environment, Transportation, Buildings and Power. The company's consulting-only business model also make the name attractive in these tariff-uncertain times. With material U.S. exposure at 42% of sales and an estimated 3% market share (in the U.S.), we believe WSP has many years of consolidation left ahead."

National rates WSP shares Outperform with a $286.00 price target, derived using an 18.0x EV/EBITDA multiple on blended 2025E/2026E forecasts with a 25% likelihood of large scale M&A.

WSP was down $4.26 or 1.7% yesterday.