Company Reports

On Aug. 15 we attended Quanta Services’ analyst event in New York City. We came away with a greater appreciation for the breadth and scale of Quanta’s business, but leave our financial expectations unchanged. Hence, we are maintaining our $175 fair value estimate.

We are maintaining our $175 per share fair value estimate for no-moat Quanta Services following its second-quarter results. We view Quanta as well positioned to benefit from the energy transition but find this as more than reflected in its valuation. Hence, we view shares as overvalued.

On July 18 Quanta Services announced the acquisition of Cupertino Electric, an electrical engineering and construction firm, for $1.54 billion in upfront consideration. We are increasing our fair value estimate to $175 from $165 as we see the valuation of the deal as attractive.

Quanta Services is a leading specialty contractor for customers in the utility, telecom, oil and gas, and renewable industries. Its strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has historically used acquisitions to supplement organic growth in achieving its strategy.

We are maintaining our $165 per share fair value estimate for no-moat Quanta Services following its first-quarter results. We view Quanta as well-positioned to benefit from the energy transition, but find this more than reflected in its valuation. Hence, we view shares as overvalued.

We increase our fair value estimate to $165 from $138 for no-moat Quanta Services following its fourth-quarter results. The main driver of our fair value increase is Quanta’s improving returns on invested capital, which drives a higher medium-term valuation beyond our explicit forecast. Despite the fair value increase, we continue to view shares as overvalued.

Quanta Services is a leading specialty contractor for customers in the utility, telecom, oil and gas energy, and renewable industries. Its strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has historically used acquisitions to supplement organic growth in achieving its strategy.

Clean energy stocks have had a roller-coaster 18 months. Optimism following the passage of the Inflation Reduction Act in August 2022 gave way to rising interest rates in 2023. We highlight three key themes for investors to focus on in 2024: interest rates, U.S. policy, and profitability.

We maintain our $138 fair value estimate for no-moat Quanta Services following its third-quarter results. We continue to like Quanta's end-market exposure and solid execution but consider these already reflected in its valuation and see shares as overvalued.

We raise our fair value estimate for no-moat Quanta Services to $138 per share from $132 following its second-quarter results. The primary driver is an increase in our renewables segment revenue expectations, which are expected to be materially higher than our prior estimate. We continue to like Quanta's end-market exposure and solid execution but consider these already reflected in its valuation and see shares as overvalued at current prices.

Quanta Services is a leading provider of specialty contracting services for customers in the utility, telecom, oil and gas energy, and renewable industries. Its strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has historically used acquisitions to supplement organic growth in achieving its strategy.

Shares of no-moat Quanta Services have continued their outperformance year-to-date, rising 29% versus 12% for the S&P 500. Over a five-year timeframe, the company’s performance is even more impressive, rising at a 41% annualized pace compared with 11% for the S&P 500. We raise our fair value estimate to $132 per share from $125 after revisiting our long-term growth assumptions, but continue to see shares as overvalued (trading 40% above our fair value estimate).

Quanta Services is a leading provider of specialty contracting services for customers in the utility, telecom, oil and gas energy, and renewable industries. Its strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has historically used acquisitions to supplement organic growth in achieving its strategy.

We maintain our $125 fair value estimate for no-moat Quanta Services following its first-quarter results. We continue to like Quanta's end market exposure and solid execution but view these as already reflected in its valuation and see shares as overvalued.

We are raise our fair value estimate for no-moat Quanta Services to $125 from $116 per share following its fourth-quarter results and 2023 outlook. Our fair value raise is driven by an increase to our revenue forecast over the next few years, particularly within the electric power and renewable infrastructure segments. We continue to like Quanta's end market exposure and solid execution, but view these as already reflected in its valuation. We see shares as overvalued.

Quanta Services is a leading provider of specialty contracting services for customers in the utility, telecom, oil and gas energy, and renewable industries. Its strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has historically used acquisitions to supplement organic growth in achieving its strategy.

We have raised our fair value estimate for Quanta Services to $116 per share from $112 following third-quarter results. The primary driver of the increase was higher revenue expectations in the company's electric power segment based on outperformance year to date. Quanta continues to be exposed to favorable trends related to grid investment and renewable energy adoption, but we view these as already priced into the shares.

Quanta Services is a leading provider of specialty contracting services for customers in the utility, telecom, oil and gas energy, and renewable industries. Its strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has historically used acquisitions to supplement organic growth in achieving its strategy.

We raise our fair value estimate for Quanta to $112 per share from $102 following second-quarter results. The primary drivers behind our fair value estimate increase are higher revenue expectations on outperformance year-to-date and potential upside from proposed legislation.

Quanta Services is a leading provider of specialty contracting services for customers in the utility, telecom, oil and gas energy, and renewable industries. The company’s strategic focus is positioning Quanta to take advantage of secular growth trends that drive increased demand for contracting services, such as electric grid investment and renewable energy deployment. The company has repeatedly used acquisitions to supplement organic growth in achieving its strategy.