Jefferies cuts Quanta Services price target to $275 from $321

On Tuesday, Jefferies analyst Julian Dumoulin-Smith adjusted the price target for Quanta Services (NYSE:PWR) stock, bringing it down to $275 from the previous target of $321. Despite this change, the analyst maintained a Hold rating on the company’s shares. According to InvestingPro data, Quanta Services, a prominent player in the Construction & Engineering industry with a market capitalization of $38.4 billion, currently maintains a "GOOD" financial health score, suggesting fundamental stability despite recent market pressures.

In a recent statement, Dumoulin-Smith explained that the revised valuation was based on a blended methodology. The adjustment reflects a series of market concerns, including the anticipated roll-off of the Investment Tax Credit ( ITC (NSE:ITC)) under the Inflation Reduction Act (IRA), challenges with wind project permitting, and the impact of the DeepSeek event. InvestingPro data confirms the stock’s recent struggles, showing a YTD decline of nearly 18% and a concerning P/E ratio of 47.3x, significantly above industry averages. These factors have contributed to Quanta Services’ stock price falling by 28% over the past month.

The analyst noted that Quanta Services’ enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple for the fiscal year 2026 has shifted from a premium to a discount in comparison to its peers. From January 10 to February 24, the EV/EBITDA multiple went from 16.7 times to 14.4 times, moving from a 0.4x premium to a 0.7x discount relative to broader market peers as multiples compressed.

Dumoulin-Smith also mentioned inflation concerns, permitting issues, and a general malaise in the artificial intelligence (AI) sector as additional factors weighing on investor sentiment. However, he expressed confidence that Quanta Services could be pro-cyclical to the inflationary cycle, which would contrast with its industrial peers due to the company’s labor backdrop.

Despite the lowered price target and the cautious stance, the analyst suggested that the recent pullback in share price might offer support to the stock. While acknowledging the long-term upside potential, the hold rating at the new price target of $275 indicates a continued cautious approach to Quanta Services’ stock for the time being. With revenue growth of 13.4% and an impressive five-year track record, investors seeking deeper insights can access comprehensive analysis and 16 additional ProTips through InvestingPro’s detailed research reports, which provide valuable context for navigating this complex market environment.

In other recent news, Quanta Services has reported significant financial developments. The company’s fourth-quarter earnings exceeded expectations, with an adjusted EPS of $2.94, surpassing estimates by 12%. Revenue for the quarter grew by 13% year-over-year, and the company anticipates a similar growth rate for 2025. Quanta Services’ backlog has increased by 15%, with notable contributions from the Renewable Energy and Electric Power sectors. The company also provided guidance for fiscal year 2025, projecting an EPS of $10.20 at the midpoint, slightly above consensus estimates.

In terms of analyst activity, BMO Capital Markets upgraded Quanta Services from Market Perform to Outperform, despite lowering the price target to $316. Stifel maintained a Buy rating but reduced the price target to $323 following the company’s financial performance. Bernstein reaffirmed an Outperform rating with a $347 price target, while Roth/MKM initiated coverage with a Buy rating and a $350 target. BofA Securities raised its price target to $368, maintaining a Buy rating, citing Quanta’s strong financial performance and growth prospects.

Additionally, Quanta Services has secured a multi-year contract to construct a large-scale fiber network for Lumen Technologies, part of a $1 billion segment. The company has also made strategic acquisitions, investing $560 million in 2025 to acquire an Australian engineering firm and a US civil contractor. These moves are expected to enhance Quanta’s vertical integration and service offerings.

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