On Wednesday, Primoris Services (NYSE:PRIM) Corporation (NASDAQ:PRIM) received an updated price target from an analyst at DA Davidson. The new price target for the stock is set at $45.00, a rise from the previous target of $40.00. Despite the adjustment, the analyst maintained a Buy rating on the stock.
The revision in the price target is anchored on the unchanged 2024 earnings estimates, which align with the company's initial guidance. The analyst noted that the 2025 EBITDA estimates have been slightly increased, while the net debt has decreased by $198 million since the third quarter. This financial position strengthens the outlook for Primoris Services.
Concerns had been raised regarding the fourth-quarter Utilities margin, which the analyst believes are mainly due to transitory issues. Additionally, projections for Utilities growth in 2024 are relatively flat. However, the analyst does not view these factors as significant obstacles to the company's potential earnings growth.
Primoris Services is anticipated to experience GAAP EPS growth ranging from 12% to over 20% in the next two years. This optimistic forecast is supported by the opportunities in the utility and industrial markets, coupled with an overall margin enrichment narrative.
The price target adjustment reflects confidence in the company's ability to capitalize on market opportunities and enhance its profit margins, despite some short-term challenges in the Utilities segment. The analyst's outlook suggests a positive trajectory for Primoris Services' financial performance in the coming years.
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