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On Thursday, Bernstein analysts reaffirmed their positive stance on Quanta Services (NYSE:PWR), maintaining an Outperform rating and a $347.00 price target for the company’s stock. The endorsement comes after a notable decline in Quanta’s stock value, with InvestingPro data showing a year-to-date decline of 21.16% and the stock currently trading at $247.95. This places the stock near its 52-week low of $227.11, while analyst targets range from $200 to $418.
Bernstein analysts see the recent sell-off as an opportunity for investors, though InvestingPro data indicates the stock is trading at a relatively high P/E ratio of 40.35x. They predict that Quanta Services will experience a compound annual growth rate (CAGR) in earnings per share (EPS) of approximately 20% through 2030, which exceeds the consensus estimates of a 15% CAGR among other analysts. With analysts forecasting EPS of $10.42 for FY2025, investors seeking deeper insights can access comprehensive valuation metrics and 13 additional ProTips through InvestingPro’s detailed research reports.
The analysts’ optimism is rooted in the company’s strategic position within the energy sector, supported by Quanta’s robust revenue growth of 13.36% over the last twelve months to $23.67 billion. They highlight that Quanta Services is well-placed to benefit from increasing electricity demand, which Regional Transmission Organizations (RTOs) forecast to grow at a CAGR of over 3% through 2040, with an even higher rate of 5% through 2030. This growth is driven by several factors, including advancements in artificial intelligence, the reshoring of manufacturing, and the proliferation of electric vehicles (EVs).
Furthermore, the analysts note that utilities are significantly revising their long-term capital expenditure budgets, with a reported increase of 17% in February 2025. Over the past five years, utility capital expenditures per terawatt-hour have surged by more than 50%, indicating a robust investment environment that Quanta Services is poised to capitalize on.
According to Bernstein’s analysis, Quanta Services has the potential to accelerate its revenue growth to a low double-digit CAGR, outpacing its historical trend by 400 basis points. The company also has considerable financial flexibility, which could allow for share buybacks, potentially contributing an additional 900 basis points to its EPS CAGR.
Investors will be watching Quanta Services closely as it navigates the expanding energy sector and leverages its position to drive growth in the coming years. The reaffirmed rating and price target by Bernstein reflect a confident outlook for the company’s financial performance and its role in the evolving electrical infrastructure landscape.
In other recent news, Quanta Services reported a 13% year-over-year revenue growth in the fourth quarter and anticipates the same growth rate for 2025, with an 8% organic growth projection. The company issued guidance for fiscal year 2025, projecting an earnings per share (EPS) of $10.20 at the midpoint, slightly surpassing consensus estimates. Quanta Services also experienced a backlog increase of 15%, with significant growth in the Renewable Energy and Electric Power sectors. Following its fourth-quarter performance, Stifel analysts adjusted their price target for Quanta Services to $323 from $388, maintaining a Buy rating despite revenue falling slightly short of expectations.
On the other hand, Jefferies analyst Julian Dumoulin-Smith lowered the price target for Quanta Services to $275 from $321, maintaining a Hold rating due to market concerns and the company’s EV/EBITDA multiple shift. Conversely, BMO Capital Markets upgraded Quanta Services from Market Perform to Outperform, revising the price target to $316, citing the company’s extensive project backlog and potential for growth. Bernstein analysts reiterated an Outperform rating with a $347 price target, highlighting Quanta’s strong fourth-quarter adjusted EPS and robust guidance for 2025.
Additionally, Quanta Services announced new incentive plans for employees, effective February 27, 2025, aimed at aligning employee interests with corporate objectives. These plans include annual and long-term incentives contingent on specific performance metrics. The company’s strategic acquisitions in early 2025, including an Australian engineering firm and a US civil contractor, further underscore its commitment to expanding service offerings and enhancing vertical integration.
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