On Thursday, Truist Securities initiated coverage on MasTec (NYSE:MTZ) with a Hold rating and set a price target of $96.00. The firm cited ongoing margin challenges as a reason for the cautious stance on the infrastructure construction company. Over the last two years, MasTec's earnings have been under pressure due to various factors including difficulties with the IEA integration, inflation, supply chain issues, and delays in projects.
According to the firm, MasTec's adjusted EBITDA margins stood at 7.2% in 2023, with the company's management guiding towards an improvement to 7.6% in 2024. Despite these challenges, the company has set its sights on reaching low double-digit adjusted EBITDA margins, striving to return to its previous peak margins of 12.8%.
The analysis by Truist Securities acknowledges the historical performance of MasTec's management team and suggests that the company has the potential to achieve double-digit margins once again. The firm's outlook anticipates that while the company has the capability to improve margins, 2024 is likely to be a transitional period towards this goal.
MasTec's recent performance and the management's guidance reflect the company's efforts to navigate through the current economic challenges while aiming for margin recovery. The price target of $96.00 set by Truist Securities reflects a neutral expectation of the stock's performance as the company works towards its margin improvement targets.
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