Mizuho Initiates Neutral Coverage on Quanta Services with $360 Price Target

Mizuho Initiates Neutral Coverage on Quanta Services with $360 Price Target

September 02, 2025

In a significant move, Mizuho Financial Group has initiated coverage on Quanta Services, Inc. (NYSE: PWR) with a Neutral rating and a price target of $360.00 [1]. The action comes amidst a robust performance by the company, which has seen its stock rise by over 50% in the past six months. Currently valued at approximately $56 billion, Quanta Services has been recognized as the largest U.S. EPC (Engineering, Procurement, and Construction) platform, known for its superior margins, vertical integration capabilities, and strong management track record.

According to InvestingPro data, analyst targets for Quanta Services range from $248 to $490, with 15 analysts recently revising their earnings estimates upward. Mizuho's analysis projects continued growth for Quanta in transmission and distribution (T&D), renewables interconnections, and select underground work segments. The firm’s price target is based on a 16x multiple of Quanta’s estimated 2027 EBITDA, with scenario analysis ranging from 11x to 20x.

Despite Quanta’s positive attributes, Mizuho sees limited potential for multiple expansion from current levels, which it describes as "already elevated" relative to industry peers. The firm noted this limitation exists despite Quanta’s higher EBITDA margins compared to competitors. According to Mizuho, Quanta’s next twelve months (NTM) return on invested capital (ROIC) of approximately 12% versus its weighted average cost of capital (WACC) lags behind peers, which could restrict further premium valuation without accelerating asset turns.

This development follows several analyst updates on Quanta Services. Stifel raised its price target to $432, highlighting the company’s strong performance in the Electric Infrastructure Solutions segment, which contributed to a 14% year-over-year increase in the overall backlog. Texas Capital Securities initiated coverage with a Buy rating and set a price target of $437, recognizing Quanta Services as a major player in the electric power market. TD Cowen also maintained a Buy rating and increased its price target from $355 to $425, noting that the company’s quarterly earnings were largely in line with expectations. Jefferies adjusted its price target to $398, maintaining a Hold rating, and expressed confidence in Quanta’s growth potential, forecasting growth exceeding 18% in 2025 [2].

Quanta Services operates in the electric power, renewable energies, and oil and gas sectors, with a significant portion of its revenue coming from the United States. The company's net sales are geographically distributed with the United States accounting for 91.3% of its revenue, followed by Canada (4.3%), Australia (2.8%), and other regions (1.6%) [3].

Mizuho’s analysis is part of a broader trend indicating a multi-year upcycle for U.S. engineering and construction companies driven by accelerating demand from data centers, electrification, and grid upgrades. The brokerage expects transmission and distribution spending to exceed $230 billion annually by 2027, with total utility investment topping $1 trillion between 2025 and 2029 [4].

References:
[1] https://www.investing.com/news/analyst-ratings/mizuho-initiates-quanta-services-stock-with-neutral-rating-360-target-93CH-4223576
[2] https://www.theglobeandmail.com/investing/markets/stocks/MZHOF/pressreleases/34530618/mizuho-financial-group-completes-stock-repurchase-and-announces-share-cancellation/
[3] https://www.marketscreener.com/news/mizuho-initiates-quanta-services-at-neutral-with-360-price-target-ce7d59dbd08ef421
[4] https://www.investing.com/news/stock-market-news/mizuho-sees-grid-data-center-boom-driving-multiyear-upcycle-for-us-contractors-4224811