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On Thursday, B.Riley updated its outlook on shares of Dycom Industries (NYSE:DY), increasing the price target to $208 from $205, while maintaining a Buy rating on the stock. This adjustment follows the company's announcement of second-quarter fiscal year 2025 results that exceeded expectations, including a notable uptick in organic revenue growth.
Dycom, a provider of specialty contracting services, also provided third-quarter fiscal year 2025 guidance that met or surpassed analyst projections. Moreover, the company revealed its recent acquisition of Black & Veatch's public carrier wireless telecom infrastructure business, a move poised to expand its service offerings.
The management's presentation was particularly optimistic, marking what the analyst described as the most bullish outlook in many years. The discussion highlighted several growth drivers for Dycom, including artificial intelligence (AI) data centers generating significant interest in national high-capacity network deployments, an irreversible trend towards extensive fiber installations, and substantial public funding for infrastructure projects.
B.Riley's analysis points to a positive shift in organic growth and EBITDA improvement for Dycom, anticipating these trends to continue into the second half of 2024 and beyond. This expectation is supported by federal investments in rural broadband and increased capital expenditures from carriers for infrastructure enhancements.
The firm reiterated its confidence in Dycom's growth trajectory and its Buy rating on the stock, with further insights to follow after the company's conference call.
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