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Bear of the Day: MasTec (MTZ)

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MasTec (MTZ - Free Report) is a $5 billion provider of building infrastructure and services to North American C&E (construction & engineering) firms. The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication and utility infrastructure.

MasTec reports its results under these four primary segments focused on broad end-user markets...

Communications (for 32% of total 2021 revenues): The segment performs engineering, construction and maintenance of communications infrastructure mainly related to wireless and wireline communications and install-to-the-home.

Oil and Gas (32%): The segment performs engineering, construction and maintenance services on oil and natural gas pipelines and processing facilities.

Power Delivery (12.8%): The segment primarily serves the energy and utility industries through the engineering, construction and maintenance of electrical transmission lines and substations.

Clean Energy and Infrastructure (primarily known as Power Generation and Industrial) (23.5%): The segment primarily serves the energy and utility end-markets and other end-markets through the installation and construction of conventional and renewable power plants, related electrical transmission infrastructure, ethanol facilities and various types of industrial infrastructure.

Why is MTZ in the Cellar of the Zacks Rank?

Since reporting earnings in early May and lowering company guidance, EPS estimates have dropped over 15% from $5.25 to $4.42.

Even next year's EPS estimates have been clipped double digits from $6.86 to $6.12.

MTZ lowered its expectation for 2022, considering project delays owing to supply disruptions. Also, the updated guidance considers restarting a large Oil & Gas project that will move into 2023 from the previously planned second-half 2022 project activity.

Elaborating on the performance and looking ahead, Jose Mas, MasTec's CEO, said, "As we have previously indicated, 2022 will mark an important transition year for MasTec, as our operations evolve to take advantage of end market growth opportunities across Communications, Clean Energy & Infrastructure and our recently expanded Power Delivery segments. Accordingly, we remain bullish on significant growth opportunities in 2023 and beyond. That said, our updated 2022 guidance range reflects project timing risks related to solar panel availability and a large Oil & Gas project restart that will move previously planned second half 2022 project activity into 2023."

Bottom line on MTZ: This is a significant player in energy and telecom infrastructure that will be around growing revenues and earnings for many years to come. There could be an buying opportunity approaching.

For right now, we need to keep an eye on the direction of EPS estimates. The Zacks Rank will let you know.


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