UBS raises Dycom stock price target to $258 from $234

On Thursday, UBS analyst Steven Fisher increased the price target for Dycom Industries (NYSE:DY) shares to $258 from $234, while retaining a Buy rating on the stock. The company, currently trading at $219.77 with a market capitalization of $6.33 billion, has demonstrated remarkable momentum with a 28.77% year-to-date return. According to InvestingPro analysis, the stock appears slightly overvalued at current levels. The revision follows Dycom’s robust fiscal first quarter earnings report and an uplift in their forecast for fiscal year 2026. Dycom delivered a performance that surpassed expectations, marked by positive organic growth despite challenging comparisons, solid margins, and a record backlog. The company maintains strong financial health with a current ratio of 2.89, indicating robust liquidity. InvestingPro data reveals 13 additional key insights about Dycom’s performance and outlook.

Dycom has indicated a growing momentum for maintenance work, wireless, Fiber to the Home (FTTH), and data center related fiber constructions. Specifically, the company has received an additional longhaul/backbone award and an award from a hyperscaler for work inside-the-fence, which has not yet been included in the backlog. UBS’s analysis suggests that changes in tax policy and customer consolidation may further drive up capital expenditures in telecommunications.

Fisher projects approximately 14% organic growth for Dycom over the remaining period of fiscal year 2026, building on the company’s impressive 12.61% revenue growth in the last twelve months. This anticipated growth is expected to support Dycom’s revenue, even amidst uncertainties surrounding the Broadband Equity, Access, and Deployment (BEAD) program, and beyond the peak of FTTH builds. With analyst targets ranging from $200 to $300 and an overall Financial Health Score of "GREAT" from InvestingPro, the company appears well-positioned for continued expansion. According to UBS Telecom (BCBA:TECO2m) analysts, FTTH builds are expected to reach their zenith next year and then stabilize in 2027. The sustained performance and strong outlook for Dycom Industries reflect the company’s ability to navigate through a potentially fluctuating market.

In other recent news, Dycom Industries reported strong financial results for Q1 2026, with earnings per share reaching $2.90, substantially higher than the projected $1.65. The company’s revenue also surpassed expectations, totaling $1.259 billion compared to the forecasted $1.19 billion. Following these results, Dycom raised its full-year revenue guidance to a range of $5.29 billion to $5.425 billion. The company highlighted its continued growth in fiber-to-home deployments and hyperscaler infrastructure projects. Dycom’s CEO, Dan Pajovich, emphasized the company’s resilience and adaptability in the telecommunications infrastructure sector. Additionally, Dycom’s wireless acquisition has been performing above expectations, contributing positively to the company’s outlook. In terms of analyst activity, firms such as BofA and JPMorgan have shown interest in Dycom’s strategic direction and growth prospects. The company has also been exploring new opportunities in hyperscaler infrastructure to drive future growth.

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