Analyst Raises Mastec Price Target by 20% on Strong Q1 Results

Stifel Nicolaus's Stanley Elliott raised their price target on Mastec (NYSE: MTZ) by 20% from $100 to $120 on May 6, 2024. The analyst maintained their Strong Buy rating on the stock.

In an assessment of Mastec's Q1 2024 earnings report, released on May 2, Elliott highlighted that both revenue and adjusted EBITDA beat expectations. The analyst maintained Mastec's status as an "interesting opportunity for a valuation re-rating in the specialist E&C sector."

For Q1 2024, Mastec reported a loss per share of $0.13, which beat the Zacks Consensus Estimate of $(0.47) and Q1 2023's $0.54 by 75.9%. Revenue for the quarter was $2.69 billion, beating the Zacks Consensus Estimate of $2.67 billion and Q1 2023's $2.59 billion by 3.9%.

Looking ahead, management provided guidance for Q2 2024 and FY 2024. For Q2 2024, Mastec expects an EPS of $0.88, slightly down from Q2 2023's $0.89. Revenue is projected to reach $3.1 billion, compared to Q2 2023's $2.87 billion. Adjusted EBITDA is expected to be $260 million, up from Q2 2023's $255.4 million, with an adjusted EBITDA margin of 8.4%, down from Q2 2023's 8.9%.

For FY 2024, Mastec anticipates an EPS of $2.95, an increase from the previous estimate of $2.69. Revenue is projected to reach $12.55 billion, up from the previous estimate of $12.5 billion. Adjusted EBITDA is expected to be $975 million, up from the previous estimate of $955 million, with an adjusted EBITDA margin of 7.8%, up from the previous estimate of 7.6%.

CEO Jose Mas expressed optimism about the company's performance, stating, "Our Q1 results significantly exceeded our expectations, and I expect 2024 to begin the validation of our investment and diversification strategy over the last few years. I believe that the investments we have made in broadening our service line offerings have placed us at the forefront of the country's future infrastructure needs."

CFO Paul DiMarco also shared positive sentiments, stating, "We are pleased to have exceeded our Q1 earnings guidance in each segment and reduced net debt leverage further than expected to 2.7x. We look forward to building on this momentum in subsequent quarters as we focus on executing for our clients and capitalizing on the numerous opportunities afforded by our end markets."

Following Elliott's rating update, other analysts also revised their price targets and ratings for Mastec on May 6, 2024. Baird's Andrew Wittmann raised their price target by 23.6% from $89 to $110 and maintained a Hold rating on the stock. Truist Securities's Jamie Cook increased their price target by 13.5% from $96 to $109 and reiterated a Hold rating. B. Riley Securities's Alex Rygiel raised their price target by 15.4% from $104 to $120 and maintained a Strong Buy rating.

According to data from WallStreetZen, 72.7% of top-rated analysts currently rate MTZ as a Strong Buy or Buy, while 27.3% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

Since Mastec's latest quarterly report on May 2, 2024, the stock price has increased by 16.3%. Year-over-year, the stock is up 20.2%. However, during that period, Mastec has trailed the S&P 500, which has gained 25.2%.

Stifel Nicolaus analyst Stanley Elliott is ranked in the top 3% out of 4,575 Wall Street analysts by WallStreetZen. With an average return of 16% and a win rate of 69.2%, Elliott specializes in the Consumer Cyclical and Healthcare sectors, among others.

MasTec Incorporated, headquartered in Coral Gables, FL, provides infrastructure for the communications, energy, and utilities sectors in the U.S. and Canada. The company specializes in building underground and overhead distribution systems, clean energy infrastructure, electrical and gas transmission systems, and water and sewer infrastructure.

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