Market Overview

Baird Upgrades MasTec, Predicts Return Of EPS Beats, Raises In Second Half

Baird Upgrades MasTec, Predicts Return Of EPS Beats, Raises In Second Half

MasTec, Inc. (NYSE: MTZ) shares have come under pressure due to concerns about a work stoppage at the Mountain Valley Pipeline project and weak cash flow. These concerns appear to be priced in, according to Baird. 

The Analyst

Baird analyst Andrew Wittmann upgraded MasTec from Neutral to Outperform with a $53 price target and designated the stock as a "fresh pick." 

The Thesis

The risk profile of the MVP project halted by the Federal Energy Regulatory Commission is not as negative as the consensus projection suggests, Wittmann said in the upgrade note. (See the analyst's track record here.)

Underlying pipeline EBITDA margins are trending at a high-teens run-rate, excluding the Rover Pipeline, which could be another catalyst when that project restarts, the analyst said. 

In 2018, $500-million-plus in cash flow from operations depends on Rover A/R collections, Wittmann said. 

Sentiment toward the stock is deflated, and shares did not suffer much on the MVP shortage, the analyst said. 

Baird highlighted the bookings ahead, including the two incremental larger transmission awards that are under verbal commitment.

The firm views MasTec's near-term fundamentals as solid and forecast the return of stronger earnings per share beats and raises in the second half of 2018. 

"We see risk-reward better balanced in the low-to-mid $50s, this is a shorter-term trading call, as was our spring downgrade." 

Baird said it will be less aggressive at share prices of more than $50.

The "Fresh Pick" designation for the stock suggests a good catalyst outlook for Q3 earnings on strong cash generation potential, Wittmann said.

The Price Action

MasTec shares were up 0.11 percent at $46.50 at the time of publication Tuesday. 

Related Links:

Fluor Will Benefit From Upcoming Capex Cycle, Bank Of America Says

Dip In Jacob Engineering Shares Improves Risk-Reward, Baird Says In Upgrade

Latest Ratings for MTZ

Sep 2019MaintainsOverweight
Aug 2019MaintainsBuy
Aug 2019MaintainsBuy

View More Analyst Ratings for MTZ
View the Latest Analyst Ratings

Posted-In: Andrew Wittmann BairdAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (MTZ)

View Comments and Join the Discussion!

Latest Ratings

ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Argus Downgrades CBS On Moonves Risks

Fintech Firm Even Financial Raises $18.8 Million Series A Round