On Wednesday, B.Riley maintained a positive stance on Tutor Perini Corporation (NYSE:TPC) shares, increasing the construction company's price target to $26.00 from the previous $17.00 while keeping a Buy rating on the stock.
The firm highlights a return to profitability in the first quarter of 2024 (1Q24), with Tutor Perini reporting positive earnings per share (EPS) and projecting continued profitability throughout the year.
This financial rebound is attributed to successful claims settlements and dispute resolutions, which are expected to contribute to another year of near-record cash flow for the company.
Tutor Perini's robust backlog, which stands at $10 billion, along with a substantial pipeline of projects valued over $1 billion, signals potential growth by the end of the year.
B.Riley points to this as an indication that the company is at a crucial juncture, with improved financials and prospects for growth reacceleration. The analyst firm anticipates these developments will be key drivers of the company's share price.
The upcoming leadership transition at Tutor Perini is also noted as a factor in the company's outlook. Current President Gary Smalley is set to succeed Ron Tutor as CEO, with Tutor moving into the role of Executive Chairman.
This change is expected to occur in 2025 and is seen as a catalyst for continued improvement in the company's profit margins and EPS.
The firm's optimism is further bolstered by diminishing liquidity risks on Tutor Perini's balance sheet. B.Riley foresees that new project awards and profit margin enhancements will contribute to a rebound in EPS, positioning the company for a stronger performance as it heads into the next fiscal year. The price target upgrade reflects confidence in Tutor Perini's trajectory toward reaccelerating growth and financial stability.
InvestingPro Insights
As Tutor Perini Corporation (NYSE:TPC) garners positive outlooks from analysts, InvestingPro metrics provide a snapshot of the company's financial health and potential. With a market capitalization of $1.08 billion, the company is showing signs of robust growth, as indicated by a 14.88% increase in revenue over the last twelve months as of Q1 2024. This is further supported by a significant quarterly revenue growth of 35.13% in Q1 2024.
InvestingPro Tips highlight that Tutor Perini is expected to see net income growth this year, reinforcing the analyst's perspective on the company's return to profitability. Additionally, the company's valuation implies a strong free cash flow yield, which may be attractive to investors seeking companies with potential for cash generation. Moreover, with a substantial 226.15% one-year price total return, the company has demonstrated a strong performance in the stock market, which could be indicative of investor confidence.
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