Moving Quanta Services (PWR) to Sell with a 54% profit since December 2019 recommendation
Quanta Services (PWR) reported strong third-quarter results yesterday, with adjusted per share earnings of $1.40, up 23% from a year ago and well ahead of the $1.09 consensus estimate. Also, the company raised its full-year adjusted earnings per share guidance to a midpoint of $3.58, which includes likely losses of about $0.39 from its Latin America operations that it is exiting, implying that remaining earnings would be close to $4.00/share. The company is clearly executing on its growth strategy.
The stock briefly traded above our 64 price target yesterday before closing at 62.66, up about 3% in a choppy but positive overall market. We view the risk/reward trade-off as unfavorable at this point and are moving the shares to a Sell from Hold, with a 54% profit since the stock was recommended last December.