On Monday, JPMorgan commenced coverage on of Centuri Holdings Inc (NYSE: CTRI) stock, assigning a Neutral rating and setting a price target of $28.00, looking ahead to December 2025.
The firm highlighted Centuri Holdings' strong positioning in the North American utility infrastructure services market, poised to capitalize on the necessary upgrades to the aging gas and electric systems, and the integration of renewable energy sources.
The coverage notes Centuri Holdings' unique focus on recurring Master Service Agreement (MSA) work, which sets it apart from competitors. Moreover, the company's recent separation from its parent company, Southwest Gas (NYSE:SWX), is expected to offer increased operational flexibility.
This could potentially lead to better financial performance and opportunities for deleveraging and mergers and acquisitions, which might result in a higher trading multiple for the company's shares.
JPMorgan's outlook for Centuri Holdings reflects the increasing demand for electricity and the consequent expansion of the electric grid. The firm anticipates that Centuri's service offerings will be in higher demand as the energy sector moves towards more intermittent renewable sources of electricity generation.
The analyst from JPMorgan mentioned the potential for upside to forecasts, assuming that Centuri Holdings leverages its newfound independence effectively. The company's strategic focus on MSA work is seen as a key differentiator in the utility infrastructure industry, potentially leading to sustained growth.
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