BMO Capital Markets analyst Ameet Thakkar has designated Quanta Services Inc (NYSE:PWR) as his top pick within the energy transition and infrastructure complex, reiterating an Outperform rating on the stock. Thakkar framed his conviction around the company's strong recent execution, expanding backlog and adjusted financial outlook, which he says align with a multi-year ramp in investment across transmission, grid modernization, data centers and industrial electrification.
Thakkar highlighted the company's most recent quarterly performance as a key signal. Organic revenue growth accelerated to approximately 27% year-over-year in the second quarter, with the Electric segment delivering roughly 33% growth - a rate well above Quanta's long-term growth framework. Management raised fiscal year 2026 guidance following the quarter, and Thakkar updated his own fiscal 2026 estimates to reflect the stronger momentum.
The analyst now models fiscal 2026 revenue of $40.2 billion, adjusted EBITDA of $4.242 billion and earnings per share of $16.85. In addition, he increased his adjusted EBITDA and EPS estimates for fiscal years 2027 through 2030, with average uplifts of 13.5% and 15.5%, respectively. Those revisions are intended to capture accelerating demand and improving operating performance as the firm scales in response to infrastructure projects.
Backlog expanded materially during the quarter, rising to $53.4 billion and producing a book-to-bill ratio of about 1.5 times for the period versus a three-year annualized average of 1.2 times. Management commentary referenced sizable transmission and generation programs that remain largely ahead of Quanta, a point Thakkar views as providing forward visibility into sustained activity beyond 2030.
Thakkar also cited operational dynamics that he believes are driving better execution and enhanced returns. An increasingly flexible workforce, broader self-perform capabilities, rising fabrication and engineering content and favorable contract structures are contributing to improved labor utilization. Together, these factors are expected to support gradual margin expansion and stronger cash generation as projects convert.
Key points
- Quanta Services is BMO analyst Ameet Thakkar's top pick in the energy transition and infrastructure theme, rated Outperform.
- The company reported approximately 27% organic revenue growth in Q2, including roughly 33% growth in its Electric segment, and raised fiscal 2026 guidance.
- Management reported a $53.4 billion backlog, equating to a book-to-bill ratio near 1.5x, and Thakkar increased his 2026-2030 adjusted EBITDA and EPS forecasts.
Sectors impacted
- Electric transmission and utilities - demand for grid modernization and transmission work.
- Data centers and industrial electrification - project work supporting increased electrification and capacity expansion.
- Energy infrastructure - generation and transmission program execution and fabrication supply chains.
Risks and uncertainties
- Execution dependency - continued margin expansion and cash generation are tied to execution improvements such as labor utilization and expanded self-perform capabilities.
- Backlog conversion - while backlog sits at $53.4 billion, the timing and conversion of that backlog into revenue will influence near- and medium-term results.
- Investment cadence - sustained benefits for Quanta require ongoing multi-year investment in transmission, generation, grid modernization, data centers and industrial electrification.
This analysis reflects Thakkar's published estimates and the company commentary summarized above. All figures and remarks are drawn from the analyst note and company disclosures referenced in that note.