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Engineering & Construction Services Industry Update
Download PDFGlobal engineering and construction industry participants include providers of engineering, construction, and construction management services to infrastructure, civil, utility and other end-markets. Key public industry players are categorized by sub-sectors as follows:
| Sub-sector | Mean Public Trading Multiples(1) | Description of Business Platform | Key Select Industry Leadership |
| Construction Contractors | TEV / LTM Rev: 0.34x TEV / LTM EBITDA: 16.4x | Providers of construction and general contracting services |
|
|---|---|---|---|
| Diversified Engineering and Construction | TEV / LTM Rev: 1.15x TEV / LTM EBITDA: 14.6x | Professional services firms offering a range of engineering, construction, and construction management services |
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| Infrastructure Services | TEV / LTM Rev: 0.98x TEV / LTM EBITDA: 12.1x | Heavy civil, infrastructure construction, and related engineering services |
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| Specialty Engineering and Construction | TEV / LTM Rev: 1.32x TEV / LTM EBITDA: 13.4x | Electrical, mechanical, industrial, and environment engineering and construction services |
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| Utility Services | TEV / LTM Rev: 0.96x TEV / LTM EBITDA: 13.8x | Electric power delivery, energy, utility engineering and construction services |
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Infrastructure and utility services companies will continue to benefit from significant CapEx spending by U.S. regulated utilities for construction of new renewable energy projects and to upgrade aging infrastructure
… With the expected significant acceleration of renewable projects, we are seeing utilities and developers increase their demand for both new grid construction and upgrades.
Jose Ramon Mas
CEO and Director, MasTec, Q2 2023 Earnings Call
… The country's need for and investment in a more robust electrical infrastructure along with continued shift to clean energy sources, present ongoing opportunities for growth…
Richard S. Swartz
President, CEO & Director, MYR Group, Q2 2023 Earnings Call
Company | CapEx Outlook | End-Market Focus Area | Commentary | ||
|---|---|---|---|---|---|
T&D | Grid | Renewables | |||
Pacific Gas and Electric Company | ~$52b 2023 – 2027 | ✔ | - | - | Increased focus on T&D storage |
Nextera Energy | $85 – 90b 2022 – 2025 | ✔ | ✔ | - | The company’s CapEx forecast includes a transmission segment contribution of ~45% through FPL |
Florida Power & Light Company | $32 – 34b 2022 – 2025 | ✔ | ✔ | - | Opportunities in 500kV transmission and T&D storm hardening projects |
American Electric Power | ~$40b 2023 – 2027 | ✔ | - | ✔ | The company’s capital forecast allocates $26b to wires |
Entergy | ~$16b 2023 – 2025 | ✔ | - | - | Projected to spend $4.5b in distribution and $2.2b in transmission |
Southern Company | ~$43b 2023 – 2027 | - | ✔ | - | Focus areas include grid reliability & resilience and pipeline replacement & maintenance |
Southern California Edison | $38 – 43b 2023 – 2028 | - | ✔ | ✔ | Over 85% of CapEx will be allocated towards grid infrastructure replacement |
Duke Energy | ~$65b 2023 – 2027 | - | ✔ | - | The capital plan will be driven by grid modernization |
Dominion Energy | ~$73bn 2023 – 2035 | ✔ | ✔ | - | $1b+ is expected towards grid transformation and nearly $1b+ for 500kV transmission line projects |
PPL Electric Utilities | ~$12b 2023 – 2026 | - | ✔ | ✔ | Projected CapEx focuses on electric and natural gas utility projects in KY, PA, and RI |
Total | ~464b |
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Company | Earnings Date | M&A Sentiment | Management M&A Commentary |
|---|---|---|---|
AECOM* | November 14 | Pause |
|
Primoris | November 8 | Pause |
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Sterling | November 7 | Active |
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Quanta | November 2 | Active |
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MasTec | November 1 | Pause |
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Granite | October 31 | Active |
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MYR Group | October 26 | Active |
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Select Infrastructure and Utilities Services companies have outperformed the S&P 500 by ~10% YoY from Jan-23 to Dec-23
| Consensus Estimate | Actual Results | % Difference | |||
|---|---|---|---|---|---|---|
Infrastructure & Utility Services | EPS(1) | Revenue | EPS(1) | Revenue | EPS(1) | Revenue |
Quanta | $2.11 | $5282 | $2.24 | $5621 | 6.2% | 6.4% |
MasTec | $1.88 | $3789 | $0.95 | $3257 | (49.5)% | (14.1)% |
AECOM* | $0.97 | $3,705 | $1.01 | $3,842 | 4.1% | 3.7% |
Primoris | $0.86 | $1,435 | $1.02 | $1,529 | 18.60% | 6.60% |
Granite | $1.40 | $1,081 | $1.69 | $1,117 | 20.7% | 3.4% |
MYR Group | $1.30 | $877 | $1.28 | $939 | (1.5)% | 7.1% |
Sterling | $1.24 | $566 | $1.26 | $560 | 0.80% | (0.96)% |
We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.
1. Normalized EPS that excludes the effects of exceptional items to standardize the metric across the peer group
2. Select Infrastructure and Utilities Services companies include those defined in the table above
*AECOM reported Q4 2023 Earnings on November 14th, 2023
Engineering & Construction Services Industry Update
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