Back to top

Image: Bigstock

MasTec (MTZ) Hits Fresh 52-Week High on Project Pipeline

Read MoreHide Full Article

Shares of MasTec, Inc. (MTZ - Free Report) reached a new 52-week high of $24.11 on Jun 7, before closing lower at $24.01. The stock price appreciation came on the back of expectation of robust performance in 2016, resulting from an active bidding environment in many of its end-markets.

This Coral Gables, FL-based infrastructure construction company has a market cap of $1.97 billion. Meanwhile, average volume of shares traded over the last three months is approximately 591K. MasTec has delivered one-year return of about 29.8% and year-to-date return of over 38%. The company has outperformed the Zacks Consensus Estimate in three out of four trailing quarters, with an average positive surprise of 35.27%.

Strengths of MasTec

Shares of MasTec improved roughly 8.8% since the company posted first-quarter 2016 results on May 5. Despite posting breakeven results in the quarter (excluding one-time items barring non-cash stock compensation expense), MasTec has raised its full-year 2016 adjusted earnings per share guidance of $1.37 to $1.47.

The company also revised its revenue outlook upward, in the range of $4.8 billion to $5 billion. The guidance reflects the company’s performance trends, including improved expectations from the Communications, and Oil and Gas segments.

During second-quarter 2016, MasTec plans significant expansion of its construction activities of two major pipeline projects to the Mexican border. It also plans to begin construction of the large long-haul oil and gas project later in the quarter. These projects are expected to drive revenue and earnings growth over the rest of the year. It anticipates revenues of approximately $1.1–$1.25 billion and adjusted earnings per share of 17–27 cents for the quarter.

MasTec’s mobile data traffic continues to expand, despite being hurt by reduced capital spending for wireless infrastructure by customers in 2015. This should result in increased demand for the company’s services.

Major carriers are in the process of upgrading to 4G technology and are testing the next generation 5G technology for deployment in the future. The company believes that the need for higher capacity as a result of consistent growth in data traffic will boost demand. Moreover, higher demand will also be driven by the need for enhanced, faster and more reliable wireless network services and products, including the upgrade of networks to the latest technology.

MasTec is also in active discussions regarding various long-haul product awards, which are expected to create crucial backlog in 2017 and 2018.

These bullish factors have naturally triggered an upward tendency in the company’s estimates over the past 30 days. In fact, the Zacks Consensus Estimate has increased 1.6% to $1.31 for 2016 and by 1.3% to $1.55 per share for 2017.

Currently, MasTec carrries a Zacks Rank #3 (Hold).

Stocks that Warrant a Look

Stocks in the same sector that are worth a look are Tutor Perini Corporation (TPC - Free Report) , Simpson Manufacturing Co., Inc. (SSD - Free Report) and Dycom Industries Inc. (DY - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Published in