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On Friday, KeyBanc Capital Markets adjusted its outlook on Tetra Tech (NASDAQ:TTEK), a leading provider of high-end consulting and engineering services with a market capitalization of $9.2 billion. Analyst Sangita Jain increased the price target for Tetra Tech shares to $41.00, up from the previous target of $34.00, while reiterating an Overweight rating on the stock. According to InvestingPro data, analyst targets for the stock currently range from $33 to $48.
The revision follows Tetra Tech’s recent earnings report, which surpassed KeyBanc’s expectations. The company achieved a year-over-year EBITDA margin expansion of 10 basis points, despite facing a 30-50 basis points impact from USAID project cancellations. With current revenue growth at 10.76% and EBITDA of $617 million, the company provided guidance that modestly raises expectations for fiscal year 2025, including a projected 10% core revenue growth.
Jain regards the latest financial disclosure as a pivotal reset for the company, addressing the concerns raised by the USAID project cancellations. The updated guidance and backlog de-booking are seen as positive steps that remove previous uncertainties and pave the way for Tetra Tech to regain some of its lost market premium.
The analyst’s comments reflect confidence in Tetra Tech’s reduced risk profile and its prospects for cleaner growth and improved margins moving forward. The new price target of $41.00 is indicative of KeyBanc’s optimistic stance on the company’s financial health and strategic direction.
In other recent news, Tetra Tech Inc. reported impressive Q2 FY2025 financial results, surpassing analysts’ expectations with an earnings per share (EPS) of $0.33, compared to the forecasted $0.30. The company’s revenue also exceeded projections, reaching $1.32 billion against the anticipated $1.04 billion. Tetra Tech’s Government Services Group showed significant growth, with a 12% year-over-year revenue increase, contributing to the strong quarterly performance. The company secured a new credit facility of $1.5 billion, aimed at supporting future growth initiatives. Additionally, Tetra Tech provided guidance for Q3 FY2025, expecting net revenue between $1.1 billion and $1.2 billion. Analyst discussions highlighted the company’s strategic positioning in the water, environmental, and infrastructure sectors. The firm also announced a 12% increase in its quarterly dividend, marking its 40th consecutive quarterly dividend with annual double-digit increases. These developments reflect Tetra Tech’s robust financial health and strategic growth focus.
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