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Investing.com - Goldman Sachs has raised its price target on Quanta Services (NYSE:PWR) to $495.00 from its previous target while maintaining a Buy rating, representing approximately 17% upside potential. The new target exceeds the current trading price of $430.15 and approaches the 52-week high of $469.43. According to InvestingPro data, the stock has already delivered an impressive 36.27% return year-to-date.
The price target increase reflects the upside potential from Quanta’s new combined cycle gas turbine (CCGT) partnership with Zachry Group, which Goldman Sachs believes warrants a 1.0x multiple premium. This premium comes despite InvestingPro analysis showing Quanta is trading at a high P/E ratio of 63.43 relative to its growth rate, with a PEG ratio of 2.55.
Goldman Sachs expects the market for CCGT construction to accelerate over the next several years, even as renewables continue to make up the majority of new generation builds, with additional opportunities in peaker plants and single cycle gas infrastructure presenting long-term growth potential.
The firm projects Quanta Services will achieve approximately 16% earnings per share (EPS) compound annual growth rate (CAGR) over the next several years, noting that potential additional opportunities from the newly formed CCGT partnership are not yet accounted for in their forward estimates. This growth projection aligns with Quanta’s recent performance, as the company has achieved 18.72% revenue growth over the last twelve months.
Goldman Sachs also cited Quanta management’s demonstrated leadership in identifying, integrating, and executing on growth opportunities, alongside strong transmission and distribution (T&D) and renewables markets where recent Edison Electric Institute (EEI) capital spending expectations support the firm’s industry outlook.
In other recent news, Quanta Services has announced a notable increase in its quarterly dividend, raising it by 10% to $0.11 per share. This adjustment will be payable on January 12, 2026, to stockholders of record as of January 2, 2026. Furthermore, Quanta Services reported its third-quarter 2025 earnings, which surpassed analyst expectations. The company achieved an adjusted earnings per share of $3.33, exceeding the forecasted $3.25. Additionally, revenues reached $7.63 billion, outperforming the anticipated $7.39 billion. Despite these positive financial results, the stock experienced a slight decline in pre-market trading. These developments highlight Quanta Services’ continued financial performance and shareholder returns.
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