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On Wednesday, KeyBanc Capital Markets adjusted its outlook on Dycom Industries (NYSE:DY), a provider of specialty contracting services. Analysts at the firm revised the price target downward to $183 from the previous target of $201, while maintaining an Overweight rating on the company’s shares. According to InvestingPro data, the stock currently trades at $152.08, with analyst targets ranging from $183 to $234, suggesting significant upside potential despite recent price weakness.
The adjustment comes amid a broader analysis of the company’s position within the telecommunications sector. KeyBanc’s analysts underscored their view that Dycom is currently in the early stages of a multi-year telecom investment expansion cycle. This cycle is driven by various factors, including private investments in fiber, federal and state-funded rural broadband programs, and datacenter-led fiber construction.
Despite the reduction in the price target, KeyBanc reinforced its positive stance on Dycom, citing the company’s significant potential for growth. The analysts believe that Dycom’s current trading valuation, at approximately 7.5 times the fiscal year 2027 estimated earnings, does not fully account for the expected length and magnitude of the growth cycle. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 2.89 and impressive revenue growth of 12.61% over the last twelve months, supporting the growth narrative.
The firm’s analysts further noted Dycom’s national presence and its scale in wireline construction as key advantages that could enable the company to achieve strong revenue growth in the upcoming years. They suggested that this growth could potentially be in the double digits, emphasizing the company’s promising outlook.
KeyBanc’s analysis reflects a conviction that despite the lowered price target, Dycom Industries remains a compelling stock to own within the telecom sector. The firm’s maintained Overweight rating indicates their belief that Dycom’s stock performance will likely outpace the average return of the stocks that KeyBanc covers over the next 12 to 18 months. InvestingPro subscribers have access to 8 additional key insights about Dycom, including detailed valuation metrics and growth projections, along with a comprehensive Pro Research Report that provides deep-dive analysis of the company’s financial position and market outlook.
In other recent news, Dycom Industries reported fourth-quarter fiscal 2025 earnings that exceeded analyst expectations. The company achieved an adjusted diluted EPS of $1.17, surpassing the forecasted $0.93, and reported revenues of $1.085 billion, above the anticipated $1.02 billion. Dycom’s full-year revenue for fiscal 2025 reached $4.702 billion, marking a 12.6% increase, with an adjusted EBITDA of $576.3 million. Following the earnings announcement, UBS and DA Davidson maintained their Buy ratings on Dycom, with price targets of $234 and $220, respectively, citing strong growth prospects in telecommunications infrastructure. Meanwhile, KeyBanc Capital Markets adjusted its price target for Dycom to $201 from $229, maintaining an Overweight rating despite a cautious first-quarter outlook due to adverse weather conditions.
Looking ahead, Dycom has projected a revenue growth of 10-13% for fiscal year 2026, excluding potential contributions from the Broadband Equity, Access, and Deployment (BEAD) program due to political uncertainties. The company has also authorized a new $150 million share repurchase program. Analysts, including Steven Fisher from UBS, anticipate substantial growth for Dycom, highlighting its strategic positioning in fiber-to-the-home and data center expansions. Dycom’s ongoing investment in digital infrastructure and its focus on fiber initiatives are expected to drive its performance in the coming years.
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