Last Update 09 Jun 26

MYRG: Backlog Visibility Through 2028 Will Face Risk From Rich Future P/E Multiple

Analysts have raised their MYR Group price target by $100 to $500, citing what they describe as the company's largest growth cycle to date. They point to a growing backlog and additional project phases for recurring customers, which they believe provide visibility through 2028.

Analyst Commentary

Street research has turned more active around MYR Group, with several firms adjusting targets and ratings in a short span. The mix of higher price targets and a downgrade on valuation gives you a blend of optimistic and cautious views to weigh.

Bullish Takeaways

Bullish analysts are lifting price targets, including moves of $100, $70, $50 and $46. This signals higher expectations for what the stock could be worth based on their models.
The view that MYR Group is in the largest growth cycle in its history supports a growth-focused thesis, where execution on this cycle is central to justifying higher valuation targets.
Comments around a growing backlog and additional phases for recurring customers suggest a pipeline of contracted work that analysts see as supporting earnings visibility through 2028.
Repeated upward revisions within a relatively short timeframe indicate that some bullish analysts are updating forecasts as they reassess revenue and margin potential tied to current projects.

Bearish Takeaways

Bearish analysts are downgrading the stock on valuation, which signals concern that the current share price already reflects a lot of the expected growth.
A valuation-driven downgrade highlights the risk that, if execution falls short or projects are delayed, the stock could trade at a premium to what some analysts see as justified by fundamentals.
The presence of both higher targets and a downgrade at the same time underlines that there is disagreement about how much growth to price in, which can add volatility if expectations shift.
For readers, this split view is a reminder to stress test personal assumptions around backlog conversion, project timing and profitability, rather than relying solely on target moves.

What’s in the News

MYR Group reported record Q1 2026 results with revenue of US$1b, 20% year over year growth, and net income of US$46.8m, with GAAP EPS of US$2.99 that was 46% above analyst estimates. Source: MYR Group Q1 2026 earnings reports.
Operating margin for Q1 2026 was 6.5%, compared with 4.1% a year earlier, supported by higher margin projects, productivity gains, and greater use of prefabrication to manage labor risks. Source: MYR Group Q1 2026 earnings reports.
Backlog reached a record US$2.84b, 7.6% higher year over year, with demand tied to data centers, grid modernization, and electrification projects. Management updated full year 2026 revenue growth guidance to about 12% and indicated expectations for further operating margin expansion. Source: MYR Group Q1 2026 earnings reports.
MYR Group agreed to acquire Valley Electric Company and Comet Electric for about US$328m, a deal expected to close by 1 July 2026. The transaction is aimed at expanding the Commercial & Industrial footprint in the Western US and Southern California across data centers, electrification, transportation infrastructure, and utility work. Source: company transaction announcement and related reports.
Q1 2026 sector recap pieces highlighted MYR Group’s 20% year over year revenue growth, upside to analyst revenue, EPS, and EBITDA estimates, and a 32% stock move after the earnings release, framing the quarter as very strong compared with construction and maintenance services peers. Source: post earnings sector comparison article.

Valuation Changes

Fair Value: Model fair value remains at $455.0 per share, with no change from the prior estimate.
Discount Rate: The discount rate has fallen slightly from 8.83% to 8.79%, implying a modest adjustment in the required return used in the model.
Revenue Growth: The revenue growth assumption is effectively unchanged at about 10.76%.
Net Profit Margin: The net profit margin assumption is effectively unchanged at about 4.87%.
Future P/E: The future P/E multiple has edged down slightly from 34.76x to 34.73x, reflecting a very small recalibration in valuation assumptions.

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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 47.9x 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 8.79%, 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 $436.88, the analyst price target of $455.0 is 4.0% higher. 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.

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