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Investing.com - Bernstein downgraded Quanta Services (NYSE:PWR) from Outperform to Market Perform on Monday, while raising its price target to $410.00 from $383.00.
The research firm cited concerns about recent energy policy shifts that will slow renewable energy development, a segment that represents approximately 30% of Quanta’s sales.
Bernstein expects the structural changes in the renewable energy sector to reduce Quanta’s long-term earnings per share compound annual growth rate from 17% to 12%, despite potential short-term benefits from project pull-forwards in 2026-2027.
The downgrade comes as Quanta shares trade at 36 times estimated 2026 earnings, significantly higher than its historical average of 13 times earnings.
Bernstein believes 31 times earnings represents a fair multiple for Quanta Services, suggesting the stock is currently fairly valued with approximately 3% downside potential from current levels.
In other recent news, Quanta Services has seen several notable developments. BofA Securities raised its price target for Quanta Services to $440 from $370, maintaining a Buy rating, citing the company’s potential to benefit from increasing demand for complex utility infrastructure solutions. Meanwhile, BMO Capital downgraded Quanta Services from Outperform to Market Perform, adjusting its price target to $400 from $352, attributing the downgrade to valuation concerns rather than business fundamentals. Seaport Global Securities initiated coverage with a Neutral rating, projecting revenues of $26.9 billion for 2025, increasing to $33.8 billion by 2027, alongside improving EBITDA margins and EPS. Moody’s Ratings affirmed Quanta’s Baa3 rating and revised the outlook from stable to positive, highlighting strong credit metrics and strategic acquisitions that have diversified the company’s portfolio. Additionally, Northland downgraded Quanta Services to Market Perform, maintaining a price target of $354, also citing valuation concerns due to the company’s rising forward price-to-earnings ratio. These recent developments provide a comprehensive view of Quanta Services’ current financial and strategic position.
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