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Quanta (PWR) Soars to 52-Week High on Renewable Energy Deal
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Quanta Services, Inc. (PWR - Free Report) touched a new 52-week high of $116.43 on Sep 3, 2021. The stock pulled back to end the trading session at $116.00, up 1.7% from the previous day’s closing price of $114.04. The uptick was probably due to its recent announcement of Avon, MN-based Blattner Holding Company acquisition. (Read more: Quanta Up 12% on $2.7B Blattner Buyout Announcement)
Meanwhile, earnings estimates for 2021 and 2022 have gained 3.4% and 3.6% over the past 30 days, respectively. This indicates 19% and 13% year-over-year growth, respectively. The company’s earnings surpassed analysts’ expectations in seven out of the trailing eight quarters.
Image Source: Zacks Investment Research
This leading specialty contracting services provider has an impressive Growth Score of A. Back-tested results show that stocks with Growth Style Scores of A or B when combined with a Zacks Rank #1 or 2 handily outperform other stocks.
Accretive Acquisitions to Boost Profitability
Quanta sees acquisitions as a fundamental component of its strategy of boosting market share and developing incremental backlog. In first-quarter 2021, it acquired a U.S.-based business that primarily provides horizontal directional drilling services for $3.5 million in cash.
In 2020, the company acquired seven businesses that primarily serve electric and gas utilities along with communications companies. Quanta invested approximately $400 million in 2020 for strategic acquisitions of seven high-quality companies with great management teams, which enhanced its ability to provide solutions to customers. These are additive to the base business and advanced the company’s strategic initiatives.
Renewable Generation Portfolio a Boon for Quanta
Quanta’s Electric Power operations have been expanding their renewable generation portfolios that would create opportunities for the company in the future. It is important to note that more than 70% of Quanta's 2020 revenues were directly tied to regulated electric and gas utility customers, core to its business. Investment in grid modernization programs to accommodate a changing fuel generation mix toward natural gas and renewables has boosted the segment’s prospects.
The company expects overall electrification trends in North America that supports a carbon-neutral economy to generate significant demand in the near and longer term for the development as well as construction of new renewable generation facilities and related services.
Quanta — which shares space with Jacobs Engineering Group Inc. (J - Free Report) , KBR, Inc. (KBR - Free Report) and AECOM (ACM - Free Report) in the same industry — operates in a highly uncertain environment, and may face stringent regulatory and permit hurdles.
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Quanta (PWR) Soars to 52-Week High on Renewable Energy Deal
Quanta Services, Inc. (PWR - Free Report) touched a new 52-week high of $116.43 on Sep 3, 2021. The stock pulled back to end the trading session at $116.00, up 1.7% from the previous day’s closing price of $114.04. The uptick was probably due to its recent announcement of Avon, MN-based Blattner Holding Company acquisition. (Read more: Quanta Up 12% on $2.7B Blattner Buyout Announcement)
Quanta — a Zacks Rank #2 (Buy) stock — has gained almost 124% in the past year, outperforming the Zacks Engineering - R and D Services industry, Zacks Construction sector and S&P 500 Index’s 73.7%, 40.3% and 36% growth, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meanwhile, earnings estimates for 2021 and 2022 have gained 3.4% and 3.6% over the past 30 days, respectively. This indicates 19% and 13% year-over-year growth, respectively. The company’s earnings surpassed analysts’ expectations in seven out of the trailing eight quarters.
Image Source: Zacks Investment Research
This leading specialty contracting services provider has an impressive Growth Score of A. Back-tested results show that stocks with Growth Style Scores of A or B when combined with a Zacks Rank #1 or 2 handily outperform other stocks.
Accretive Acquisitions to Boost Profitability
Quanta sees acquisitions as a fundamental component of its strategy of boosting market share and developing incremental backlog. In first-quarter 2021, it acquired a U.S.-based business that primarily provides horizontal directional drilling services for $3.5 million in cash.
In 2020, the company acquired seven businesses that primarily serve electric and gas utilities along with communications companies. Quanta invested approximately $400 million in 2020 for strategic acquisitions of seven high-quality companies with great management teams, which enhanced its ability to provide solutions to customers. These are additive to the base business and advanced the company’s strategic initiatives.
Renewable Generation Portfolio a Boon for Quanta
Quanta’s Electric Power operations have been expanding their renewable generation portfolios that would create opportunities for the company in the future. It is important to note that more than 70% of Quanta's 2020 revenues were directly tied to regulated electric and gas utility customers, core to its business. Investment in grid modernization programs to accommodate a changing fuel generation mix toward natural gas and renewables has boosted the segment’s prospects.
The company expects overall electrification trends in North America that supports a carbon-neutral economy to generate significant demand in the near and longer term for the development as well as construction of new renewable generation facilities and related services.
Quanta — which shares space with Jacobs Engineering Group Inc. (J - Free Report) , KBR, Inc. (KBR - Free Report) and AECOM (ACM - Free Report) in the same industry — operates in a highly uncertain environment, and may face stringent regulatory and permit hurdles.