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Valued at a market cap of $36.6 billion, Quanta Services, Inc. (PWR) provides infrastructure solutions for the electric and gas utility, renewable energy, communications, and pipeline and energy industries. Based in Houston, Texas, the company plans, designs, installs, maintains, and repairs most types of network infrastructure.
Companies worth more than $10 billion are generally described as “large-cap stocks,” and Quanta Services fits right into that category. The company is a leading national provider of specialty contracting services and one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry.
Shares of PWR are trading 12.2% below their 52-week high of $286.87, achieved on May 28. The construction engineering company’s stock has declined 7.3% over the past three months, significantly lagging behind the Dow Jones Industrials Average’s ($DOWI) 3.3% gain over the same time frame.
However, in the longer term, PWR stock is up 16.7% on a YTD basis, surpassing DOWI’s 6.2% gains. Shares of PWR have rallied 22.8% over the past 52 weeks, outperforming DOWI’s 15.5% return over the same time frame.
To confirm the bearish trend, PWR has been trading below its 200-day moving average since mid-July and its 50-day moving average since early September.
PWR has benefited from rising demand for modernizing utility infrastructure and expanding renewable energy generation. Its impressive asset utilization ratio and year-over-year earnings growth have also contributed to its upward price movement.
However, the stock fell 4% following its mixed Q2 earnings release on Aug. 1. The company’s adjusted EPS grew 15.2% year-over-year to $1.90 but fell short of Wall Street estimates of $1.93. Its revenue of $5.6 billion exceeded Wall Street forecasts of $5.5 billion. The company raised its full-year 2024 revenue and adjusted EPS estimates. It expects adjusted EPS to be between $8.32 and $8.87 and revenue to be between $23.5 billion and $24.1 billion.
PWR has outpaced its rival, AECOM’s (ACM) 2.4% gain on a YTD basis and 9.6% returns over the past 52 weeks.
Despite PWR’s recent underperformance, analysts remain optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 15 analysts in coverage, and the mean price target of $289.08 suggests a premium of 14.9% to its current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
