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Bull of the Day

We have upgraded our recommendation from Neutral to Outperform on Quanta Services, Inc. (PWR). The company's third quarter 2012 results were encouraging, with earnings of 45 cents -- 25% ahead of the Zacks Consensus Estimate and 80% above the prior-year level.

Quanta's strengths include strong execution, increasing demand for its services and customer confidence in the company. Revenues from the electric power segment grew 32%, while the natural gas and pipeline segment continued to improve despite the lack of large-diameter pipeline projects.

Over the last five years, PWR's shares have traded in a range of 18.4x to 46.4x trailing 12-month earnings. Our target price is $32.00 or 20.4x 2013 EPS, which is well within the historical range.

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