Is Quanta Services Stock A Buy After Texas Power Crisis?

Is Quanta Services Stock A Buy After Texas Power Crisis?

Share to Linkedin Quanta Services (NYSE: PWR), a provider of infrastructure services for electric utilities, is likely to benefit following the widespread electricity outages in Texas this month. The blackout was caused by extremely cold weather that resulted in surging power demand as key generation sources went offline. Now, the crisis has brought the focus back to aging electrical infrastructure and the years of inadequate investment in the power grid in the United States. Although grid modernization has been on the agenda for a while, regulators and utilities are now likely to carry out upgrades with more urgency, causing demand for services provided by the likes of Quanta to rise. While Quanta stock is already up by about 10% thus far in February, trading at about $78 per share currently, the stock is still valued at under 19x forward earnings, a reasonable valuation considering the company's growth potential. Some other trends that could help the stock include the Biden Administration's renewable energy push, increasing capital expenditures by utility companies, and a growing trend of outsourcing among U. S. utilities, partly due to aging work forces. See our analysis on Why Is Quanta Services Stock Up 158% Since 2018? for more