On Monday, Jefferies updated its assessment of Quanta Services (NYSE:PWR), increasing the company’s price target from $274.00 to $298.00 but keeping a Hold rating on the stock. Currently trading at $321.14, InvestingPro analysis indicates the stock is trading above its Fair Value, with a strong 10.5% return over the past week. The adjustment comes in the wake of the firm’s first-quarter performance and future projections.
In his statement, the Jefferies analyst expressed optimism about Quanta Services’ record first-quarter backlog and the ongoing discussions regarding data centers and the potential for 765kV transmission projects. With a market capitalization of $47.6 billion and a prominent position in the Construction & Engineering industry, these factors contribute to the analyst’s positive outlook on the company’s prospects.
Despite the favorable view on certain aspects of Quanta Services’ business, the analyst also noted some areas of concern. Specifically, there is a cautious stance regarding the less certain outlook for renewable energy projects and the potential for distribution capital expenditures to overshadow other investments. The company maintains a moderate debt level with a debt-to-equity ratio of 0.64, while operating with a gross profit margin of 15%. However, there is still hope for a positive outcome from the Long Island Power Authority (LIPA) project.
The analyst further explained the rationale behind the updated financial estimates, stating, "Post 1Q, we raise our FY25 estimate to $10.43”40bps above the $10.39 Consensus and 80bps above the $10.35 raised-guidance midpoint." This reflects a more bullish stance on the company’s earnings potential than the consensus and the company’s own raised guidance.
The maintained Hold rating indicates that while the analyst sees positive aspects in Quanta Services’ future, there are still enough uncertainties that warrant a neutral stance on the stock at this time. The comment highlights a particularly strong position on the 765kV transmission angle, citing Quanta Services’ historical market share in this area as a key point of interest. For deeper insights into Quanta Services’ valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company’s financial health, currently rated as "GREAT" with a score of 3.01 out of 5.
In other recent news, Quanta Services reported impressive financial results for the first quarter of 2025, with adjusted earnings per share (EPS) of $1.78, surpassing the forecast of $1.74. The company also exceeded revenue expectations, reporting $6.23 billion compared to the projected $5.88 billion. Following these results, Quanta Services raised its full-year 2025 guidance for revenue, adjusted EBITDA, and EPS, indicating a positive outlook for the remainder of the year. Additionally, Bernstein analysts have maintained an Outperform rating on Quanta Services and increased their price target from $347.00 to $383.00, reflecting confidence in the company’s future performance. This adjustment follows Howmet Aerospace’s robust first-quarter earnings, which exceeded expectations and contributed to Quanta’s positive trajectory. Furthermore, Quanta Services continues to benefit from strong demand in renewable energy and data center infrastructure solutions, underscoring its strategic focus on these growing markets. The company also highlighted its expanding technology infrastructure solutions as a key driver of its robust performance in the first quarter. These developments suggest a continued positive trajectory for Quanta Services in the evolving energy and infrastructure sectors.
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