Bernstein on Quanta Services (PWR): 'Quality on Sale'

Bernstein SocGen Group analyst Chad Dillard reiterated an Outperform rating and $347.00 price target on Quanta Services (NYSE: PWR).

The analyst commented: "Quality on Sale; PWR’s 30%+ sell-off since late Jan presents an attractive entry point. Our fundamental work sees PWR delivering a ~20%+ EPS CAGR through 2030 vs. street at 15%. In a structural load growth world, PWR has a unique right to win as a gatekeeper to the grid build-out’s bottlenecks.

(1) The secular load growth thesis remains intact and PWR is a massive beneficiary. RTOs forecast electricity demand growing at a 3%+ CAGR ithrough 2040 (+5% through 2030), and utilities are responding with big revisions to their long-term capex budgets (+17% in Feb ‘25). Electrical intensity is increasing (AI data centers, reshoring, EVs) and so is capital intensity — in the last 5 years, utility capex per TWh has grown by 50%+. These trends are a big positive for PWR. (2) The company is poised to grow earnings at a 20% CAGR through 2030. In a 1.5-2% load growth environment, PWR can compound revenues at a low double-digit CAGR, a 400bps step up vs. its historical trend. In addition, it has a significant cash optionality to buyback shares, contributing to 900bps of EPS CAGR."

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 $249.10 yesterday.

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