Baird has begun its coverage on Emcor (EME, Financial) by assigning an Outperform rating, along with a price target of $560. The firm is optimistic about Emcor's range of mechanical and electrical skilled labor services, which are serving diverse markets currently undergoing substantial investment activity. According to Baird, Emcor has established a robust foundation through effective execution, strategic talent investments, and prudent capital deployment.
Baird highlights that Emcor's asset-light business model fosters steady generation of free cash flow while maintaining a strong balance sheet. This financial stability provides the company with flexibility and reduces risk. Overall, the firm sees Emcor as a solid investment opportunity due to these factors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for EMCOR Group Inc (EME, Financial) is $499.50 with a high estimate of $570.00 and a low estimate of $384.00. The average target implies an downside of 2.25% from the current price of $510.99. More detailed estimate data can be found on the EMCOR Group Inc (EME) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, EMCOR Group Inc's (EME, Financial) average brokerage recommendation is currently 2.0, 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 EMCOR Group Inc (EME, Financial) in one year is $319.17, suggesting a downside of 37.54% from the current price of $510.99. 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 EMCOR Group Inc (EME) Summary page.
EME Key Business Developments
Release Date: April 30, 2025
- Revenue: $3.87 billion, a year-over-year growth of 12.7%.
- Operating Income: $318.8 million, with an operating margin of 8.2%.
- Diluted Earnings Per Share (EPS): $5.26, an increase of 26% from the previous year.
- Non-GAAP Adjusted Operating Income: $328.1 million, or 8.5% of revenues.
- Non-GAAP Adjusted Diluted EPS: $5.41.
- Electrical Construction Revenue: $1.09 billion, a 42.3% increase.
- Mechanical Construction Revenue: $1.57 billion, a 10.2% increase.
- US Building Services Revenue: $742.6 million, a decrease of 4.9%.
- Industrial Services Revenue: $359 million, an increase of 1.4%.
- UK Building Services Revenue: $105.3 million, stable compared to the previous year.
- Remaining Performance Obligations (RPOs): $11.8 billion, a 17.1% organic growth year-over-year.
- Organic Book-to-Bill Ratio: 1.18 for the quarter.
- Operating Cash Flow: $108.5 million.
- Cash Balance: Just under $577 million at the end of March.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EMCOR Group Inc (EME, Financial) reported a strong first quarter with revenues of $3.87 billion, reflecting a year-over-year growth of 12.7%.
- The company achieved an operating income of $318.8 million, with an operating margin of 8.2%, and a 26% increase in diluted earnings per share to $5.26.
- The Electrical and Mechanical Construction segments drove performance with revenue increases of 42.3% and 10.2%, respectively.
- EMCOR Group Inc (EME) successfully integrated Miller Electric, contributing $183 million in revenues and adding approximately $400 million of RPOs in the network and communications market.
- The company raised the low end of its diluted earnings per share guidance by $0.40, reflecting confidence in continued strong operating margins for 2025.
Negative Points
- The Industrial Services segment was impacted by a slower start to the turnaround season due to frigid January weather in Texas, affecting operating income and margin.
- There was an increase in the allowance for credit losses, impacting the Industrial Services segment's operating income by $4 million.
- The US Building Services segment faced headwinds with a 4.9% decrease in revenues due to reduced site-based revenues.
- High-tech manufacturing RPOs decreased, although the company remains optimistic about future awards in this sector.
- The acquisition of Miller Electric was dilutive to the Electrical segment margin, primarily due to intangible asset amortization.
