Last Update 01 Dec 25

MTZ: Electric Transmission Wins And Backlog Expansion Will Drive Future Momentum

MasTec's analyst price target has been raised by analysts, increasing from $227 to a range as high as $290. Stronger order pipelines, margin opportunities in clean energy, and a growing backlog across multiple segments support a more constructive outlook.

Analyst Commentary

Analyst coverage of MasTec highlights a generally constructive outlook, with several firms increasing their price targets and reiterating positive ratings. The assessments reflect both improving operational trends and macro drivers that could influence valuation and future growth.

Bullish Takeaways

Multiple analysts have significantly raised price targets, noting robust anticipated order pipelines, growing backlogs, and diversified exposure across end markets such as clean energy, gas pipelines, and data centers. These factors are seen as catalysts for sustained revenue growth.
Expectations for margin improvement are supported by ongoing execution in the clean energy and communications segments. Several firms see opportunities for further expansion due to operational leverage and increased project wins.
Analysts point to positive macro tailwinds, such as increased utility spending on transmission and distribution, infrastructure investments, and the company’s ability to outpace relative laggards in the industry.
Recent wins in electric transmission projects and improved metrics like return on invested capital and free cash flow conversion are expected to drive a re-rating in the company’s valuation.

Bearish Takeaways

Some caution remains regarding overall industry visibility, particularly in residential markets, where performance may be more mixed and less predictable in the near term.
A heightened competitive landscape within certain divisions, such as utility-scale solutions, could put pressure on margins if market conditions shift.
While backlog growth is positive, analysts acknowledge execution risk in converting orders into profitable revenue, especially given fluctuating capital expenditure cycles among utility customers.
Inventory improvements across machinery and construction support group-level optimism, but lower expectations in certain segments could lead to variability in MasTec's quarterly results.

What's in the News

MasTec has updated its earnings guidance for the year ending December 31, 2025, projecting revenue of $14,075 million and GAAP net income of $399 million. Diluted earnings per share are expected to reach $4.80. (Key Developments)
The company is actively seeking merger and acquisition opportunities that align with its earnings targets and strategic growth areas, according to Chief Financial Officer Paul Dimarco. MasTec intends to remain selective and focus on transactions that add value and address customer demands that are not currently met by the company. (Key Developments)
An update on MasTec's buyback activity for the third quarter of 2025 shows that no shares were repurchased during the period, and no progress has been made on the previously announced buyback program. (Key Developments)

Valuation Changes

Fair Value Estimate remains unchanged at $246.67.
Discount Rate has risen slightly, moving from 8.89% to 8.90%.
Revenue Growth projection is essentially flat, staying at approximately 10.14%.
Net Profit Margin remains stable at around 4.39%.
Future P/E multiple has increased marginally, now at 29.96x.

Strong sector tailwinds, record backlog, and policy support position MasTec for sustained growth and improved revenue visibility in core energy and communications markets.
Operational efficiency initiatives and strategic scaling efforts are set to drive margin expansion and long-term earnings upside beyond current market expectations.
Heavy investment to support growth, combined with client concentration and regulatory risk, could pressure margins and earnings if demand, execution, or policy shifts disappoint.

Catalysts

About MasTec

An infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure primarily in the United States and Canada.What are the underlying business or industry changes driving this perspective?

Rapid acceleration in utility grid modernization, data center build-outs, and renewable energy investment is fueling double-digit revenue growth and record backlog in MasTec's Power Delivery and Clean Energy & Infrastructure divisions; the company's leading position and customer relationships indicate continued outsized top-line expansion over the next multi-year cycle.
The structural build-out of fiber networks and 5G deployment, as evidenced by record backlog, broad customer demand (including major carriers' ambitious fiber targets), and strong year-over-year growth in Communications, sets up a sustained growth runway for both revenues and margins as volumes scale and operational leverage increases.
Recent policy developments (including extended tax credits for renewables and regulatory clarity from new federal legislation) have strengthened MasTec's bookings pipeline and provide long-duration tailwinds, reducing policy risk and supporting visibility on new project awards-this improves future revenue predictability and supports higher valuation.
Strategic workforce and equipment expansion in anticipation of large-scale pipeline and infrastructure investments (notably for 2026 and beyond) positions MasTec to capture significant incremental margins as the upcoming mega-cycle in energy infrastructure hits, with initial margin headwinds from ramp-up expected to reverse as utilization rises.
Multi-year investments in operational efficiency, technology, and customer framework agreements are driving sequential and year-over-year improvements in EBITDA and net margins across segments; continued execution on these initiatives is likely to further support margin expansion and long-term earnings power, which appears underappreciated by the current stock valuation.

MasTec Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming MasTec's revenue will grow by 9.6% annually over the next 3 years.
Analysts assume that profit margins will increase from 2.0% today to 4.3% in 3 years time.
Analysts expect earnings to reach $730.8 million (and earnings per share of $8.84) by about September 2028, up from $265.6 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $558.5 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.3x on those 2028 earnings, down from 51.1x today. This future PE is lower than the current PE for the US Construction industry at 34.7x.
Analysts expect the number of shares outstanding to decline by 0.42% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.59%, as per the Simply Wall St company report.

MasTec Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Increased headcount and investment in equipment to support anticipated growth, while positioned as short-term, is already impacting margins in 2025; if demand fails to materialize as expected or projects are delayed, these higher fixed costs could depress net margins and earnings over the longer term.
Heavy dependence on top-tier customers and large-scale projects, especially in Clean Energy, Power Delivery, and Pipeline segments, introduces significant client concentration risk-potential contract delays or cancellations by key customers could create material revenue volatility and impact predictable cash flows.
The company's strategy of rapidly scaling workforce and resources exposes it to execution risk during large, complex projects (including cost overruns, labor inefficiencies, and project delays), which historically has led to thin margins and could further pressure earnings and margin consistency if not well managed.
Secular changes in government policy, tax incentives, and regulatory environment (e.g., renewables credits, permitting for pipeline/infrastructure) are flagged as major demand drivers; changes or uncertainty in these frameworks could curtail project volumes or delay backlog conversion, impacting multi-year revenue growth forecasts.
Industry-wide labor shortages and reliance on skilled trades for utility, energy, and communications infrastructure represent a persistent risk that may increase project costs, cause bottlenecks, or reduce MasTec's ability to effectively execute and scale, thereby squeezing margins and potentially capping long-term earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $205.389 for MasTec based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $227.0, and the most bearish reporting a price target of just $140.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $17.2 billion, earnings will come to $730.8 million, and it would be trading on a PE ratio of 27.3x, assuming you use a discount rate of 8.6%.
Given the current share price of $174.99, the analyst price target of $205.39 is 14.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

MTZ: Record Backlog And Utility Projects Will Drive Robust Revenue Visibility