On Monday, KeyBanc has raised the price target for shares of MasTec (NYSE:MTZ) to $120 from the previous $113. The firm has maintained its Overweight rating on the stock. The adjustment reflects a new valuation multiple of 10.5 times the projected 2025 earnings before interest, taxes, depreciation, and amortization (EBITDA), up from the prior multiple of 10 times.
The revised price target is based on an increased enterprise value (EV) to adjusted EBITDA ratio for the year 2025. This change comes despite the firm’s estimates remaining unchanged. KeyBanc's analysis suggests that MasTec's shares are currently trading at a discount compared to peers within the Specialty Engineering & Construction (E&C) sector.
MasTec's stock price, as of the last close, was $108.07. According to KeyBanc, this price represents a 9.6 times multiple on the estimated 2025 EBITDA, indicating that MasTec is trading at a 2.8 times discount to the Specialty E&C group. This comparison underscores the rationale behind KeyBanc's decision to maintain an Overweight rating on the stock.
The Overweight rating suggests that KeyBanc expects MasTec to outperform the average return of the stocks that the firm covers over the next 6-12 months. The price target increase is a reflection of the potential for higher returns for investors based on the firm’s financial projections for MasTec.
Investors and market watchers will likely monitor MasTec's future performance to see if it aligns with KeyBanc's projections and justifies the increased price target and positive rating.
InvestingPro Insights
As KeyBanc raises its price target for MasTec (NYSE:MTZ), a glance at the real-time data from InvestingPro provides a broader perspective on the company's financial health and market performance.
With a market capitalization of approximately $8.48 billion and a significant price uptick over the last six months of 120.1%, MasTec's market activities suggest a robust investor confidence, which is echoed by a strong return of 22.86% over the last month. The company's revenue growth also remains solid, with a 16.24% increase over the last twelve months as of Q1 2024.
InvestingPro Tips indicate that while analysts predict the company will be profitable this year, there are concerns as seven analysts have revised their earnings downwards for the upcoming period. Moreover, the stock's RSI suggests it is in overbought territory, which could indicate a potential retraction or consolidation phase in the near future. These insights, coupled with the fact that MasTec does not pay a dividend to shareholders, may influence investor decisions depending on their individual strategies and risk appetite.
For those looking to delve deeper into MasTec's analytics, InvestingPro offers a comprehensive suite of additional tips. There are 12 more InvestingPro Tips available at https://www.investing.com/pro/MTZ, which could provide further guidance on the stock's potential trajectory. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of expert analysis and real-time data to inform their investment choices.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.