KeyBanc Analyst Raises Mastec Price Target by 6.2% on Bullish Outlook

By Don Francis, Editor
May 14, 2024 9:05 AM UTC
KeyBanc Analyst Raises Mastec Price Target by 6.2% on Bullish Outlook

KeyBanc's Sangita Jain raised their price target on Mastec (NYSE: MTZ) by 6.2% from $113 to $120 on 2024/05/13. The analyst maintained their Strong Buy rating on the stock.

In a report released on May 13, 2024, Jain revealed that their decision to raise the price target was driven by a comprehensive analysis of Mastec's Industrials (Engineering & Construction) portfolio. This deep dive was conducted following the release of Mastec's Q1 2024 earnings report on May 2, 2024. Jain highlighted that positive end market trends were supporting greater target multiples, which contributed to their bullish outlook on the stock.

Mastec's Q1 2024 earnings report showed impressive results. The company reported a loss per share of $0.13, beating the Zacks Consensus Estimate of $(0.47) by a significant margin of 75.9%. Additionally, it surpassed Q1 2023's earnings per share of $0.54. Mastec's revenue for Q1 2024 came in at $2.69 billion, beating the Zacks Consensus Estimate of $2.67 billion and showing a 3.9% increase compared to Q1 2023's revenue of $2.59 billion.

Looking ahead, Mastec's management provided guidance for Q2 2024 and the full fiscal year. For Q2 2024, the company expects earnings per share of $0.88, slightly lower than Q2 2023's $0.89. Revenue is projected to reach $3.1 billion, up from Q2 2023's $2.87 billion. Adjusted EBITDA is anticipated to be $260 million, higher than Q2 2023's $255.4 million, but with a slightly lower margin of 8.4% compared to 8.9% in Q2 2023. For the full fiscal year 2024, Mastec expects earnings per share of $2.95, up from the previous estimate of $2.69. Revenue is projected to reach $12.55 billion, slightly higher than the previous estimate of $12.5 billion. Adjusted EBITDA is anticipated to be $975 million, up from the previous estimate of $955 million, with an adjusted EBITDA margin of 7.8%, higher than the previous estimate of 7.6%.

CEO Jose Mas expressed confidence in the company's performance, stating, "Our Q1 results significantly exceeded our expectations, and I expect 2024 to begin the validation of our investment and diversification strategy over the last few years. I believe that the investments we have made in broadening our service line offerings have placed us at the forefront of the country's future infrastructure needs." Mas highlighted the expected growth in power demand and the increasing demand for data capacity and speed as factors that position all of Mastec's segments for growth.

CFO Paul DiMarco also expressed satisfaction with the Q1 earnings and emphasized the company's focus on executing for clients and capitalizing on opportunities in the end markets. DiMarco stated, "We look forward to building on this momentum in subsequent quarters as we focus on executing for our clients and capitalizing on the numerous opportunities afforded by our end markets."

In addition to the price target hike for Mastec, Jain also raised their price target on Dycom Industries Inc by 7%, from $158 to $169, while maintaining a Strong Buy rating for the stock.

According to WallStreetZen, Jain is ranked in the top 20% out of 4,581 Wall Street analysts, with an average return of 20.9% and a win rate of 77.8%. Jain specializes in the Technology, Utilities, and Industrials sectors, making them well-suited to analyze and provide insights on Mastec's performance and potential.

As of now, 72.7% of top-rated analysts rate Mastec as a Strong Buy or Buy, while 27.3% see it as a Hold. No analysts recommend or strongly recommend selling the stock, indicating a generally positive sentiment among analysts.

Since the release of Mastec's Q1 2024 earnings report on May 2, 2024, the stock price has increased by 17.6%. Over the past year, the stock has gained 10.2%. However, during the same period, Mastec has trailed behind the S&P 500, which has seen a 26.2% increase.

MasTec Incorporated is a company that provides infrastructure services for the communications, energy, and utilities sectors in the U.S. and Canada. The company specializes in building underground and overhead distribution systems, as well as clean energy, natural gas, electrical and gas transmission and distribution systems, and water and sewer infrastructure. MasTec was founded in 1929 and is headquartered in Coral Gables, FL.

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