TSX futures tick up after index logs fresh record high close
Investing.com - Mizuho has initiated coverage on Quanta Services (NYSE:PWR) with a Neutral rating and a $360.00 price target, according to a research note released Thursday. The company, currently valued at approximately $56 billion, has seen its stock rise over 50% in the past six months. According to InvestingPro data, analyst targets for the stock range from $248 to $490, with 15 analysts recently revising their earnings estimates upward.
The research firm identified Quanta as the largest U.S. EPC (Engineering, Procurement, and Construction) platform, highlighting its superior margins, vertical integration capabilities, and strong management track record. Mizuho noted that Quanta has consistently beaten EBITDA and EPS estimates since the third quarter of 2019. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with revenue growing at 18.3% over the last twelve months.
Mizuho’s analysis projects continued growth for Quanta in transmission and distribution (T&D), renewables interconnections, and select underground work segments. The firm’s price target is based on a 16x multiple of Quanta’s estimated 2027 EBITDA, with scenario analysis ranging from 11x to 20x.
Despite Quanta’s positive attributes, Mizuho sees limited potential for multiple expansion from current levels, which it describes as "already elevated" relative to industry peers. The firm noted this limitation exists despite Quanta’s higher EBITDA margins compared to competitors.
According to Mizuho, Quanta’s next twelve months (NTM) return on invested capital (ROIC) of approximately 12% versus its weighted average cost of capital (WACC) lags behind peers, which could restrict further premium valuation without accelerating asset turns.
In other recent news, Quanta Services has been the focus of several analyst updates following their latest earnings report. Stifel raised its price target for Quanta Services to $432, highlighting the company’s strong performance in the Electric Infrastructure Solutions segment, which contributed to a 14% year-over-year increase in the overall backlog. Texas Capital Securities initiated coverage with a Buy rating and set a price target of $437, recognizing Quanta Services as a major player in the electric power market. TD Cowen also maintained a Buy rating and increased its price target from $355 to $425, noting that the company’s quarterly earnings were largely in line with expectations. Jefferies adjusted its price target to $398, maintaining a Hold rating, and expressed confidence in Quanta’s growth potential, forecasting growth exceeding 18% in 2025. These developments reflect a positive outlook from analysts, driven by the company’s recent financial performance and strategic market positioning.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.