Last Update 25 Jun 26

MYRG: Backlog Visibility To 2028 Will Confront Rich Future P/E Risk

The analyst price target for MYR Group is now framed closer to $500, reflecting recent Street research that highlights strong electrical T&D and C&I project backdrops, growing backlog visibility, and current valuation premiums that some analysts view as a reason for more balanced expectations.

Analyst Commentary

Recent Street research on MYR Group reflects a mix of optimism about its project pipeline and caution around how much of that potential may already be reflected in the share price. Analysts are focusing on the strength of MYR Group's electrical T&D and C&I businesses, the size and visibility of its backlog, and the implications of the stock's current valuation premium.

Bullish Takeaways

Bullish analysts highlight what they describe as a very strong backdrop for electrical T&D services that MYR Group is positioned to serve, which they see as supportive for long-term growth in project opportunities.
Expansion of the C&I segment, particularly tied to data center and other complex developments, is viewed as an appealing growth area that could help MYR Group broaden its revenue mix over time.
The company's backlog and additional phases of work for recurring customers are seen by bullish analysts as providing multi-year visibility on project activity, which they view as supportive for planning and execution.
Price target increases toward the US$500 range underscore that some bullish analysts see room for further value creation if MYR Group can continue to win projects and execute effectively against current expectations.

Bearish Takeaways

Bearish analysts point to a current valuation premium relative to peer averages and view this as a reason for more measured expectations, particularly after MYR Group shares have already gained more than 75% year to date.
There is caution that a premium valuation leaves less room for error on execution, so any setbacks in winning work, delivering projects or managing costs could have a more pronounced impact on the stock.
Some analysts flag the puts and takes in T&D margins over time, suggesting that variability in profitability across projects is an area for investors to watch even within a supportive demand backdrop.
Cautious views also reflect the idea that a substantial part of the expected growth and backlog visibility may already be embedded in current pricing, which could limit upside if results only match existing consensus expectations.

What’s in the News for MYR Group

Institutional shareholding score for MYR Group is reported at 10.00, ranking 1 out of 42 companies in the Construction & Engineering industry, according to TradingKey.
Institutional investors collectively hold 112.99% of MYR Group shares, with a quarter over quarter change of 9.14%, based on the same TradingKey report.
Large institutional investors, including Wellington Management Company, LLP, are reported to have increased their holdings in MYR Group, according to TradingKey.
From January 1, 2026 to February 4, 2026, MYR Group reported no share repurchases under the buyback announced on July 30, 2025, and stated that the program was completed without any shares repurchased.

Valuation Changes for MYR Group

Fair Value: Model fair value remains unchanged at $455.0, indicating no adjustment to the core valuation anchor used in this analysis.
Discount Rate: The discount rate has risen slightly from 8.79% to 8.81%, a modest uptick that marginally increases the hurdle rate applied to MYR Group's projected cash flows.
Revenue Growth: The forecast revenue growth assumption is effectively unchanged at 10.76%, indicating a consistent view on MYR Group's potential top line expansion in the model.
Net Profit Margin: The assumed net profit margin remains stable at about 4.87%, reflecting no material change in expected profitability on projected revenues.
Future P/E: The future P/E assumption has risen slightly from 34.73x to 34.74x, a minimal adjustment that leaves the valuation multiple largely in line with the prior model setting.

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Key Takeaways

Expanding multi-year contracts, focus on electrification, and higher-margin projects are driving increased demand, revenue visibility, and steady margin improvement.
Strong balance sheet and strategic investments, including skilled workforce development and acquisitions, support growth, pricing power, and enhanced shareholder returns.
Rising labor costs, shrinking renewables, volatile backlog, and fierce competition threaten margin expansion, stable earnings, and long-term profitability amid ambitious growth investments.

Catalysts

About MYR Group

Through its subsidiaries, provides electrical construction services in the United States and Canada.What are the underlying business or industry changes driving this perspective?

Significant multi-year utility contracts (notably the new 5-year master service agreement with Xcel Energy and others in the Northeast/Midwest) are set to expand recurring revenues and improve backlog visibility, supporting higher future revenue and greater earnings predictability.
Sustained momentum in electrification-spanning grid upgrades, data center buildouts, and transportation-coupled with robust private/public sector investment, is expected to drive strong demand for MYR Group's infrastructure services, elevating the overall addressable market and supporting top-line growth.
Increased project mix in higher-margin segments (such as battery storage and data centers), combined with operational improvements and careful contract selectivity, are positioned to contribute to steady margin expansion and higher net earnings over time.
Strategic capital allocation and a healthy balance sheet (low leverage, substantial borrowing capacity, and new $75 million share repurchase authorization) enable continued investment in organic growth, accretive acquisitions, and share buybacks, supporting future EPS and shareholder returns.
Active response to ongoing labor shortages by internally developing skilled workforce and augmenting capabilities through targeted acquisitions positions MYR Group to capitalize on sector-wide supply constraints, supporting pricing power and sustaining or improving net margins.

MYR Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming MYR Group's revenue will grow by 10.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.7% today to 4.9% in 3 years time.
Analysts expect earnings to reach $253.1 million (and earnings per share of $16.85) by about June 2029, up from $141.9 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 36.4x on those 2029 earnings, down from 51.6x today. This future PE is lower than the current PE for the US Construction industry at 46.9x.
Analysts expect the number of shares outstanding to grow by 0.31% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.81%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Declining contribution from solar and renewables projects (from 10% of T&D revenues last year to just 4% and continuing to decrease) signals increased dependence on core T&D and C&I markets, exposing MYR Group to the risk that if utility or industrial demand falters, future revenue growth and backlog could be negatively impacted.
Labor cost inflation and project inefficiencies are already partially offsetting margin improvements; ongoing skilled labor shortages and wage increases across the industry could compress gross margins and constrain net earnings as the company bids and executes new, larger contracts.
Sequential decline in C&I backlog despite major wins, combined with management's acknowledgment of lumpy backlog and extended contract negotiations, raises the risk of volatile or unpredictable revenue streams and cash flows, which could pressure earnings consistency and reduce investor confidence.
Higher SG&A and capital expenditures required to capture growth opportunities (such as ramp-up for larger projects and expanded labor investment) could erode operating leverage if topline growth slows, impacting profitability and free cash flow over the long term.
Intensifying competition in both T&D and C&I segments, with rising acquisition multiples cited by management and broader industry consolidation, may force MYR Group to either pay a premium for strategic acquisitions or accept lower margins on competitive bids, potentially dampening margin expansion and 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 $455.0 for MYR Group 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 $564.0, and the most bearish reporting a price target of just $295.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $5.2 billion, earnings will come to $253.1 million, and it would be trading on a PE ratio of 36.4x, assuming you use a discount rate of 8.8%.
Given the current share price of $470.31, the analyst price target of $455.0 is 3.4% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
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.

Accelerating Grid Upgrades And Data Center Demand Will Drive New Opportunities