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On Friday, BofA Securities adjusted its outlook on Quanta Services (NYSE:PWR), increasing the company’s price target from $355.00 to $368.00 and reaffirming a Buy rating on the stock. According to InvestingPro data, the stock currently trades at a premium valuation with a P/E ratio of 51x and an EV/EBITDA multiple of 22.5x, reflecting the market’s high expectations for this prominent construction and engineering player. The firm acknowledged Quanta’s impressive financial performance, highlighting a robust fourth-quarter EBITDA of $738 million, which surpassed consensus estimates by 7%. This success was attributed in part to a significant improvement in the Electric Power margin, which saw a year-over-year increase of 260 basis points to 13.1%. The company’s last twelve months EBITDA reached $2 billion, with revenue growing at 13.4% to $23.7 billion.
Quanta Services has provided guidance that anticipates another year of double-digit growth in both revenue and EBITDA for 2025. This positive outlook is supported by substantial capital expenditures from utilities and technology sectors. The company’s backlog has reached a new high, climbing to $34.5 billion from $34 billion in the third quarter of 2024, with the Renewables sector demonstrating particular strength.
The analyst from BofA Securities expressed confidence in Quanta Services, describing the company as the premier solutions provider in its field. The firm’s central role in addressing energy demands and maintaining the power grid was emphasized as a key factor in its continued success. The analyst’s statement concluded with a reiteration of the Buy rating, signaling continued optimism about Quanta Services’ market position and future performance. With an overall "GOOD" financial health score on InvestingPro and analysts predicting 14% revenue growth for FY2025, investors can access detailed valuation metrics, 13 additional ProTips, and comprehensive analysis through the Pro Research Report available on the platform.
In other recent news, Quanta Services Inc. reported its fourth-quarter 2024 earnings, which exceeded analysts’ expectations with an adjusted EPS of $2.94, surpassing the projected $2.62. However, the company’s revenue of $6.55 billion fell short of the anticipated $6.61 billion. Despite the revenue miss, Quanta Services achieved a record free cash flow of $1.6 billion for the year. The company has been focusing on strategic acquisitions and segment restructuring to support its growth initiatives. Notably, Quanta Services has maintained a strong growth trajectory, consistently achieving record revenues and adjusted EBITDA over the past several years. Looking ahead, the company projects record revenues and improved margins for 2025, with potential double-digit growth in adjusted EBITDA and EPS. Additionally, Quanta Services recently acquired two companies for approximately $562 million in cash and stock, further expanding its portfolio. The company’s strategic focus on data center infrastructure and AI-related grid investments positions it favorably in the evolving energy landscape.
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