MYRG: Transmission Upswing And Data Center Demand Will Support Future Momentum

Analysts nudged our MYR Group fair value estimate modestly higher, to $240.60 from $238.40. This reflects increased confidence in transmission and distribution driven growth and improving bidding trends, partially offset by lingering caution on solar exposure and a richer valuation.

Analyst Commentary

Bullish Takeaways

• Bullish analysts see a favorable setup for MYR Group heading into upcoming quarters, citing notable acceleration in transmission and distribution activity and improving bidding and award trends that support sustained revenue growth.
• Survey work points to T&D equipment and services activity running above expectations in Q3, reinforcing confidence that MYR Group is well positioned to capture incremental demand tied to grid modernization and infrastructure spending.
• Goldman Sachs raising its price target to $248 reflects conviction that structural drivers, including transmission and distribution spending and data center related construction, can support continued earnings expansion despite pockets of project level volatility.
• Improved execution versus the project challenges seen a year ago is viewed as reducing operational risk, which supports a higher valuation multiple as investors gain confidence in the durability of growth.

Bearish Takeaways

• Bearish analysts point to valuation as a key constraint, noting that the shares are trading close to prior target levels, which limits upside potential absent a further positive surprise in growth or margins.
• There remains a cautious stance on solar exposure after difficult projects last year, with some investors concerned that new utility scale solar work could reintroduce execution risk and margin volatility.
• The shift to a more neutral stance from some corners of the market signals that a meaningful portion of the recovery and T&D growth story may already be reflected in the current share price.
• While thematic demand drivers, such as data center construction, are supportive, skeptics question whether the current pace of awards and backlog growth can fully justify the richer valuation if macro or regulatory conditions soften.

What's in the News

• MYR Group completed its previously announced February 26, 2025 share repurchase program, buying back 639,207 shares, or 3.96% of shares outstanding, for a total of $75 million (company filing).
• No additional shares were repurchased between July 1 and September 30, 2025 under either the February 26, 2025 or July 30, 2025 buyback authorizations. This signals a pause in capital deployment toward buybacks in recent months (company filing).
• The July 30, 2025 repurchase authorization remained fully unused as of September 30, 2025, with 0 shares and $0 million deployed under the new program (company filing).

Valuation Changes

• Fair Value Estimate has risen slightly to $240.60 from $238.40, reflecting modestly higher long term earnings expectations.
• Discount Rate has increased marginally to 8.51% from 8.48%, implying a slightly higher required return in the valuation model.
• Revenue Growth assumption is effectively unchanged, remaining around 8.66%, signaling stable expectations for top line expansion.
• Net Profit Margin forecast is effectively unchanged at approximately 3.67%, indicating no material revision to long term profitability assumptions.
• Future P/E multiple has risen slightly to 24.18x from 23.94x, pointing to a modestly richer valuation applied to forecast earnings.