On Thursday, B.Riley maintained a Buy rating on Quanta Services (NYSE:PWR), while increasing the stock's price target to $286 from the previous $246. This adjustment follows the announcement of the company's first-quarter results for 2024, which surpassed expectations, particularly due to strong performance in the Electric Power segment.
Quanta Services reported on Wednesday that their Q1 results had exceeded projections, with margins in the Electric Power segment contributing significantly to the positive outcome. The company's backlog has remained steady since the end of 2023, hovering just below $30 billion. The firm is on track to reach record backlog levels this year, bolstered by robust demand and the ongoing energy transition.
The company has modestly raised its guidance for 2024, while reaffirming its adjusted EBITDA at the midpoint of previous estimates. B.Riley has slightly adjusted their own estimates, citing the company's stable financial position, which is expected to support further growth and potentially lead to increased dividends or more share repurchases.
Quanta Services is recognized for its leading role in the North American energy transition and the growing demand for electric power. Its combination of leadership, experience, and scale is seen as a key advantage in the market. B.Riley's analyst believes that the company's strong balance sheet will continue to enable Quanta Services to deliver solid free cash flow.
The firm's Buy rating is reiterated with the belief that Quanta Services represents the optimal investment to capitalize on the North American energy transition and the anticipated increase in electric power load growth.
InvestingPro Insights
Following B.Riley's positive outlook on Quanta Services (NYSE:PWR), InvestingPro data reveals that the company's market capitalization stands robust at $37.34 billion. Despite a relatively high P/E ratio of 48.34 for the last twelve months as of Q1 2024, the company's revenue growth remains impressive, with a 22.51% increase in the same period. This growth is a testament to the company's strong performance, especially in the Electric Power segment that contributed to the better-than-expected Q1 results.
InvestingPro Tips also highlight Quanta Services as a prominent player in the Construction & Engineering industry, which aligns with the company's leading role in the North American energy transition mentioned in the article. Additionally, with a high return of 51.83% over the last year, investors may find Quanta Services an attractive option for capitalizing on the growing demand for electric power infrastructure. For those looking for more insights, there are 15 additional InvestingPro Tips available at: https://www.investing.com/pro/PWR. To access these tips and more in-depth analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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