Goldman Sachs Starts EMCOR Group (EME) at Sell

Goldman Sachs analyst Adam Bubes initiates coverage on EMCOR Group (NYSE: EME) with a Sell rating and a price target of $445.00.

The analyst comments: "We initiate coverage of EMCOR Group, Inc. (EME) - a specialty contractor - with a Sell rating and $445 12-month price target (-16% downside vs 3% average upside for our coverage). We have been impressed with EME's productivity gains, margin expansion, and value added M&A track record. However, we see a challenging cyclical backdrop in the medium term with (i) EBIT margin leading indicators turning lower and (ii) our forecast for nearly flat private-non residential construction spending growth in 2025E (Exhibit 13) vs a 14% CAGR 2021-2024. As a result, we see an unfavorable risk/reward skew with valuation >2 standard deviations above the historical average. We forecast a +3.5% EBITDA CAGR 2024-2026 at the bottom quartile of our coverage on our -3% below consensus 2025-2026 EBITDA estimates. Our 12-month price target of $445 is based on 13x 2025E EBITDA of $1,487 mn."

For an analyst ratings summary and ratings history on EMCOR Group click here. For more ratings news on EMCOR Group click here.

Shares of EMCOR Group closed at $526.95 yesterday.

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