Dycom Industries (DY) PT Raised to $296 at UBS

UBS analyst Steven Fisher raised the price target on Dycom Industries (NYSE: DY) to $296.00 (from $288.00) while maintaining a Buy rating.

The analyst commented, "We raise our estimates and price target for DY. We think the stock weakness with FQ2 results rightly reflects the organic revenue miss in the quarter and Q3 growth guidance, but creates an opportunity ahead of accelerating organic growth thereafter, along with improving margins and cash flow. Therefore, we reiterate our Buy rating. Investors were disappointed by the organic growth miss and backlog decline. While a couple of customers may have slowed down their spend programs, they are still executing the programs overall, and others are poised to accelerate their spend programs. Also, DY is gaining more clarity on data center revenue potential, and called out a $20b TAM over the next 5 years. While back end weighted, we think this could possibly drive mid to upper single digit growth in the earlier years from this opportunity alone. Regarding backlog, Dycom received a new award after the quarter, that, if booked in the quarter, would have driven sequential growth in backlog vs. Q1 (hundreds of millions of dollars)."

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