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On Monday, Kansas City Capital upgraded MYR Group (NASDAQ:MYRG) stock rating from Perform to Outperform. The decision came following a period of notable share price decline and a positive outlook on the company’s role in the energy sector. Shares of MYR Group have fallen 32.5% from their 52-week high of $181.02, with a particularly steep 17.5% decline year-to-date. According to InvestingPro analysis, the stock is currently trading near its Fair Value, suggesting a balanced risk-reward proposition for investors.
Kansas City Capital highlighted MYR Group’s strategic position to support the ongoing energy transition and the growing demand for electricity. The firm’s analysts believe that the company’s improved profitability in the fourth quarter of 2024 and the expectations for 2025 present a compelling case for the upgrade. They underscored the company’s recent financial performance as a solid foundation for future growth. InvestingPro data reveals that while the company maintains a moderate debt level and operates with an 8.6% gross profit margin, it has achieved a "Fair" overall financial health score, with particularly strong momentum metrics. Subscribers can access 12 additional ProTips and comprehensive analysis through the platform’s detailed research reports.
The upgrade reflects the analysts’ confidence in MYR Group’s potential for a rebound. They cited a 16% upside potential for the company’s shares, which they attribute to the firm’s strong positioning and market opportunities. This positive sentiment is supported by the broader industry trends favoring companies involved in the energy transition.
Kansas City Capital set a new 12-18-month price target for MYR Group at $143. This target suggests a significant increase from the company’s current trading levels and indicates the firm’s analysts’ belief in the stock’s value appreciation over the next year to year and a half.
MYR Group’s stock is expected to respond to the upgraded rating and new price target as the market digests the implications of Kansas City Capital’s analysis. Investors will be closely monitoring the company’s performance to see if it aligns with the analysts’ expectations.
In other recent news, MYR Group Inc. reported its fourth-quarter 2024 earnings, which fell short of market expectations. The company posted earnings per share of $0.37, significantly below the forecasted $0.70, and reported revenues of $830 million, missing the expected $886.58 million. This represents a 17% decrease in revenue compared to the same period last year. Despite these setbacks, MYR Group managed to improve its gross margin to 10.4% from 9.7% year-over-year. The company’s backlog increased to $2.6 billion, reflecting a 2.5% rise from the previous year. Analysts from KeyBanc and Baird noted challenges in clean energy projects, which affected revenue and profitability, but the company expects stronger free cash flow generation in 2025. MYR Group’s management remains optimistic about future opportunities in core markets such as data centers, healthcare, and infrastructure improvements.
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