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Quanta Services, Inc. (PWR) – Wall Street’s Best Digest Daily Alert – 7/28/21

Coverage of the shares of this engineering and construction company has recently been initiated at Cowen & Co., with an ‘Outperform’ rating, and at Piper Sandler with an ‘Overweight’ ranking.

Coverage of the shares of this engineering and construction company has recently been initiated at Cowen & Co., with an ‘Outperform’ rating, and at Piper Sandler with an ‘Overweight’ ranking.

Quanta Services, Inc. (PWR)
From Dow Theory Forecasts

Quanta Services shares have gained 23% this year but slipped 4% over the past three months. The shares could see room for more price appreciation, as President Biden’s U.S. infrastructure plan appears to be gaining momentum after several months of stalled talks. A bipartisan group of U.S. lawmakers has settled on a plan for about $600 billion on new physical infrastructure, encompassing roads, bridges, railways, and pipes. Biden’s initiatives for investing in human infrastructure—covering areas like public education and health care—is slated to be part of a separate $3.5 trillion budget plan. We might not see a vote on some parts of the plan for several months.

Raising its full-year outlook in May, Quanta noted strong demand even without the U.S. infrastructure plan. Analyst estimates have ticked higher in the past 30 days, with the consensus projecting growth of 16% for earnings per share and 9% for revenue in 2021, followed by 13% higher profits on 7% sales growth in 2022.

For the June quarter, Quanta is expected to report earnings per share of $1.03, up 40%, on revenue of $2.98 billion, up 19%. Quanta has topped the consensus profit estimate in seven straight quarters. But it has struggled to manage analysts’ sales expectations, missing the consensus in three of the past four quarters.

Quanta is a FocusList Buy and a Long-Term Buy.

Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, July 19, 2021