FBR Capital Raises Price Target on Dycom Industries (DY) to $115 Following 3Q EPS Beat
FBR Capital reiterated an Outperform rating on Dycom Industries (NYSE: DY), and raised the price target to $115.00 (from $100.00), following the company's 3Q earnings report. Dycom reported an adjusted EPS of $1.08, ahead of the consensus of $0.74. F4Q16 guidance implies FY16 EPS of $4.30–$4.45.
Analyst Alex Rygiel commented, "Last night, after the close, Dycom Industries, an FBR Alpha Generator, announced a substantial beat for F3Q16 relative to our and consensus expectations. Organic revenue growth was 29% YOY due to 1 Gbps wireline deployments, market share gains, and some growth in wireless; adjusted EPS were $1.08, versus our estimate of $0.77 and the consensus of $0.74. F4Q16 guidance implies FY16 EPS of $4.30–$4.45 (versus $2.41 in FY15), and guidance for F1Q17 was better than expected. Total backlog continued to grow, almost doubling on a YOY basis, with 12-month backlog of $2.2B (+37% YOY) for a book to bill of 1.3x. We are raising our EPS estimates for FY16 and FY17 to $4.35 (from $3.90) and $4.90 (from $4.50), respectively. We continue to believe we are still in the early innings of a much longer and broader telecom/cable spending cycle from which DY is the best positioned to benefit given its scale, strong customer relationships, and experience. We are raising our price target to $115 (from $100), which represents 10x our FY17E EV/EBITDA. We reiterate our Outperform rating and believe investors should continue to buy DY shares even with the strong move in the share price following F3Q16 results."
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Shares of Dycom Industries closed at $72.52 yesterday.