DA Davidson Downgrades Quanta Services (PWR) to Underperform; Major Pipeline Project Delay Expected to Slow Earnings Growth

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PWR Hot Sheet

Rating Summary:
3 Buy, 3 Hold, 0 Sell

Rating Trend: Down

Down

Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23

DA Davidson downgraded Quanta Services (NYSE: PWR) from Neutral to Underperform with a price target lowered from $25 to $18.

DA analyst says, "Reports indicate the Keystone XL Pipeline project, intended to move oil from Canada to the U.S., will be delayed pending further review by the government. Quanta had been named as one of three contractors on the multi-billion dollar project originally expected to be built in 2012 and 2013...We expect Quanta will be able to replace a portion of the revenue associated with this project, although margins may be lower given current industry capacity. As indicated and detailed in the attached model we are reducing our earnings estimates to incorporate the assumed delay beyond 2013, partially offset by a slightly more optimistic outlook for electrical transmission construction activity."

For an analyst ratings summary and ratings history on Quanta Services click here. For more ratings news on Quanta Services click here.

Shares of Quanta Services closed at $18.94 yesterday, with a 52 week range of $15.37-$24.18.

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