Tuesday, DA Davidson maintained a Buy rating on MasTec (NYSE:MTZ), a leading infrastructure construction company, and raised the shares target to $120 from the previous $100. The firm's analyst cited the stock's valuation at 12 times and 11 times the estimated EBITDA for 2024 and 2025 respectively, which is still at a notable discount compared to peers like Quanta Services (NYSE:NYSE:PWR).
The analyst highlighted the importance of consistent execution for the company, which could lead to a broader multiple expansion. Recent quarters have shown more stability in results, which supports the positive outlook. The business environment for MasTec remains favorable with strong drivers supporting its growth trajectory.
The firm is particularly interested in MasTec's prospects within the Oil & Gas sector, given the current leverage to gas and LNG development. This segment of MasTec's business is noted to carry relatively attractive margins, which adds to the company's appeal for investors.
MasTec's focus on execution and consistency is expected to be crucial for the company's continued success. The upward revision in the price target reflects confidence in the company's strategic positioning and its ability to capitalize on favorable market conditions, specifically within the Oil & Gas industry.
InvestingPro Insights
The latest evaluation by DA Davidson underscores a promising future for MasTec, with a revised price target that speaks to the company's strong market position. Providing additional context to this analysis, InvestingPro data indicates that MasTec's market capitalization stands at $8.24 billion, with a forward-looking P/E ratio for the last twelve months as of Q1 2024 at 28.57. This aligns with the company's expected net income growth this year, as noted in one of the InvestingPro Tips.
Investors should note, however, that the company has not been profitable over the last twelve months, and the stock has been flagged for volatility and for trading at a high EBIT valuation multiple. Nonetheless, MasTec has demonstrated strong returns, with a significant 19.31% return over the last week and a 114.04% return over the last six months, according to InvestingPro data. These metrics could be indicative of the market's response to the company's strategic initiatives and the favorable business environment, particularly in the Oil & Gas sector that DA Davidson finds promising.
For those looking to delve deeper into MasTec's financials and performance metrics, InvestingPro provides additional insights. With more tips available on the platform, investors can gain a comprehensive understanding of the company's potential and risks. To further enhance your investment research, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.