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On Tuesday, Primoris Services Corporation (NYSE:PRIM) received a positive outlook from Jefferies, as the firm began coverage on the stock with a Buy rating and established a price target of $73.00. Jefferies highlighted Primoris as an engineering and construction (E&C) company with diversified end-markets, which is well-positioned to capitalize on the increasing customer spending in renewables and energy infrastructure. This sector is expected to see growth due to various demand tailwinds.
The analyst at Jefferies underscored the company’s ability to generate profitable organic growth and margin expansion, along with sustainable cash flow and strong financial and operational execution. InvestingPro analysis reveals the company maintains a healthy financial profile with a moderate debt level and has consistently paid dividends for 18 consecutive years. These factors were notably present in the company’s performance throughout 2024 and are anticipated to continue driving momentum into the years 2025-2026, with analysts forecasting EPS of $4.40 for FY2025.
Primoris’s engagement in the E&C industry places it at the forefront of sectors that are rapidly evolving due to the push for renewable energy sources and the modernization of energy infrastructure. The company’s focus on these areas is expected to meet the growing demands of its customers.
The Jefferies analyst’s statement emphasized the company’s robust performance in the previous year, which is expected to bolster the valuation thesis for Primoris. The analyst remarked, "We initiate coverage of Primoris at Buy and $73 PT. PRIM is an E&C company in diversified end-markets positioned to benefit as customers increase spending on renewables and energy infrastructure to accommodate numerous demand tailwinds. Profitable organic growth, margin expansion, sustainable cash flow, and financial and operational execution are key to the valuation thesis; all of which were on display in 2024 with momentum building into 2025-2026."
The new coverage and price target set by Jefferies reflect a confidence in Primoris’s strategic direction and its potential for continued growth in the coming years. The company’s stock performance will be closely watched by investors as it navigates the evolving landscape of the E&C sector.
In other recent news, Primoris Services Corporation reported its fourth-quarter and full-year 2024 financial results, surpassing analyst expectations. The company achieved an adjusted earnings per share (EPS) of $1.13, significantly exceeding the consensus estimate of $0.75, and reported a 15% increase in revenue to $1.7 billion. This strong performance was supported by robust cash flow, with operating cash flow reaching a record $508 million. KeyBanc Capital Markets adjusted its price target for Primoris Services to $90, down from $96, while maintaining an Overweight rating, reflecting a revised multiple rather than a change in the company’s outlook.
Primoris’s growth was driven by significant demand in sectors such as power delivery, renewables, and communications. The company also demonstrated effective financial management by reducing its debt by $168.9 million and expanding its project backlog by 9% to $11.9 billion. DA Davidson maintained a Buy rating with an $85 price target, highlighting the company’s impressive fourth-quarter performance and strong cash flow. The Utilities segment saw a 15% year-over-year revenue increase, with gross margins improving by 470 basis points to 12.1%.
Primoris provided guidance for 2025, projecting EPS between $3.70 and $3.90, with adjusted EPS expected to range from $4.20 to $4.40. The company anticipates continued growth in communications and power delivery, focusing on margin improvement and strategic expansion in renewable energy. Analysts, including Sangita Jain from KeyBanc, noted the company’s favorable growth trends and strong position in key sectors.
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