Texas Capital Securities initiates Buy rating on Quanta Services stock

Investing.com - Texas Capital Securities initiated coverage on Quanta Services (NYSE:PWR) with a Buy rating and a price target of $437.00 on Thursday, joining a strong bullish consensus on the $56.34 billion market cap company. According to InvestingPro data, 15 analysts have recently revised their earnings expectations upward, with price targets ranging from $248 to $490.

The firm identified Quanta Services as the largest U.S. company providing engineering, construction, and maintenance services to the electric power market, covering transmission, distribution, generation, and other sectors including industrial, technology, utility, and broadband. InvestingPro analysis confirms its position as a prominent player in the Construction & Engineering industry, with the company maintaining strong revenue growth of 18.26% over the last twelve months.

Texas Capital Securities noted that Quanta’s Electric Power segment stands to benefit from long-term tailwinds in grid expansion, upgrades, and hardening, driven by increasing power demand from population growth, migration, and technological advances.

The firm highlighted recent AI data center investments as creating significant demand for infrastructure to support energy-intensive facilities, positioning PWR as potentially "the best, most-attractive security for investors to benefit from the insatiable demand for energy."

Texas Capital Securities projects mid-to-high single-digit organic revenue growth for Quanta, supplemented by acquisitions, leading to 10-12% overall growth and 15%+ EPS growth "for the foreseeable future," while arguing that the stock’s relatively high valuation multiple is justified.

In other recent news, Quanta Services reported its second-quarter 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $2.48 compared to the forecasted $2.46. The company also exceeded revenue predictions, achieving $6.8 billion against an expected $6.57 billion. Following these results, several analyst firms have adjusted their price targets for Quanta Services. TD Cowen raised its target to $425, maintaining a Buy rating, after noting a slight increase in the company’s backlog. Jefferies increased its price target to $398, expressing confidence in Quanta’s growth potential, particularly looking towards 2025. Stifel also adjusted its target to $432, citing strong performance in the Electric Infrastructure Solutions segment, which saw a 21% increase in backlog. The company’s overall backlog rose 14% year-over-year, despite a 12% decline in the Underground Utility and Infrastructure Solutions segment. These developments reflect a positive outlook from analysts on Quanta Services’ future growth.

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