Primoris Services shares vaulted to a fresh buy point Tuesday after Guggenheim swung to a bullish stance, betting the contractor will ride the data-center boom to new highs.
The heavy-construction specialist’s stock jumped after Guggenheim analyst Joseph… upgraded the name to buy from neutral and slapped on a 160 price target, according to Dow Jones Newswires. Shares hovered near 137 in morning action, leaving more than 15% upside to the new bull case.
Upgrade Details
- Upgrade: Buy from neutral
- Price target: 160
- Prior close: Roughly 137
- Implied upside: 15%+
The move marks a sharp shift in sentiment on the Dallas-based infrastructure builder, whose projects span pipelines, power lines and-crucially-massive server farms needed for the AI boom.
Data-Center Bet
Guggenheim’s call centers on Primoris’ ability to cash in on mushrooming demand for data-center construction. Tech giants and cloud providers are racing to add capacity, creating a pipeline of complex electrical and mechanical work that plays directly to the firm’s strengths.
Daniel J. Whitman noted the analyst sees Primoris capturing a disproportionate share of these contracts, thanks to its specialized utility and industrial expertise.
Market Reaction
Investors greeted the upgrade with heavy volume, pushing PRIM above a key technical level that chart watchers view as a springboard for further gains. The stock had already rallied more than 20% year-to-date, and Tuesday’s pop extends that run.
Construction Tailwinds
Beyond data centers, Guggenheim cited a broader pickup in U.S. infrastructure spending. Federal dollars earmarked for grid upgrades, renewable energy and natural-gas lines should keep Primoris’ crews busy through at least 2025, the firm argued.
Valuation Appeal
Even after the recent climb, shares trade at a modest premium to historical averages, leaving room for multiple expansion if earnings beat expectations. Guggenheim models double-digit revenue growth this year and next, driven by both organic wins and the integration of recent acquisitions.
Risk Factors
The bullish thesis isn’t bulletproof. Supply-chain snarls and labor shortages still dog the construction sector, while rising interest rates could throttle some private projects. Primoris also faces stiff competition from larger engineering giants for marquee data-center jobs.
Wall Street Sentiment
Guggenheim joins a growing camp of optimists. Three of the five covering firms now rate PRIM a buy, with an average target of 152, implying another 11% upside even after Tuesday’s surge.
Key Takeaways
- Guggenheim upgrade sparks fresh buy signal for Primoris
- 160 price target offers 15%+ upside from current levels
- Data-center buildout cited as key growth driver
- Shares already up 20% YTD before Tuesday’s pop
- Federal infrastructure spending adds multiyear tailwind
