Goldman Sachs has shifted its stance on MYR Group (MYRG, Financial), downgrading the stock from Buy to Neutral while raising the price target to $168 from $145. This adjustment comes amid a comprehensive review of the Americas Energy Services sector. The firm still anticipates that MYR Group, along with MasTec, will gain from increased utility expenditure. However, at current valuation levels, MYRG appears to be factoring in a robust revenue growth rate through 2030, aligning with general utility spending forecasts.
Goldman Sachs suggests a cautious approach, indicating a preference for waiting until there’s more clarity on potential factors that might influence further estimate adjustments.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for MYR Group Inc (MYRG, Financial) is $163.17 with a high estimate of $174.00 and a low estimate of $145.00. The average target implies an downside of 0.83% from the current price of $164.53. More detailed estimate data can be found on the MYR Group Inc (MYRG) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, MYR Group Inc's (MYRG, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for MYR Group Inc (MYRG, Financial) in one year is $146.07, suggesting a downside of 11.22% from the current price of $164.53. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the MYR Group Inc (MYRG) Summary page.
MYRG Key Business Developments
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MYR Group Inc (MYRG, Financial) reported a 2.2% increase in first-quarter revenues, reaching $834 million compared to the same period last year.
- The company's CNI segment saw a significant revenue increase of 14.4%, driven by fixed price contracts and T&E contracts.
- Gross margin improved to 11.6% from 10.6% in the previous year, aided by favorable change orders and better-than-anticipated productivity.
- Operating cash flow for the first quarter was $83 million, a substantial increase from $8 million in the same period last year.
- Total backlog increased by 9% year-over-year, reaching $2.64 billion, indicating strong future business prospects.
Negative Points
- T&D revenues decreased by 5.8% compared to the same period last year, primarily due to selectivity on clean energy projects.
- Higher costs related to labor and project inefficiencies partially offset the increase in gross margin.
- The effective tax rate increased to 28.9% from 18% in the previous year, impacting net income.
- Interest expense rose by $300,000 due to higher average outstanding debt balances.
- The company exhausted its current share repurchase program, with no immediate plans to announce a new one.
