FBR Capital Raises Price Target on Dycom Industries (DY) to $115 Following 3Q EPS Beat

FBR Capital reiterated an Outperform rating on Dycom Industries (NYSE: DY), and raised the price target to $115.00 (from $100.00), following the company's 3Q earnings report. Dycom reported an adjusted EPS of $1.08, ahead of the consensus of $0.74. F4Q16 guidance implies FY16 EPS of $4.30–$4.45.

Analyst Alex Rygiel commented, "Last night, after the close, Dycom Industries, an FBR Alpha Generator, announced a substantial beat for F3Q16 relative to our and consensus expectations. Organic revenue growth was 29% YOY due to 1 Gbps wireline deployments, market share gains, and some growth in wireless; adjusted EPS were $1.08, versus our estimate of $0.77 and the consensus of $0.74. F4Q16 guidance implies FY16 EPS of $4.30–$4.45 (versus $2.41 in FY15), and guidance for F1Q17 was better than expected. Total backlog continued to grow, almost doubling on a YOY basis, with 12-month backlog of $2.2B (+37% YOY) for a book to bill of 1.3x. We are raising our EPS estimates for FY16 and FY17 to $4.35 (from $3.90) and $4.90 (from $4.50), respectively. We continue to believe we are still in the early innings of a much longer and broader telecom/cable spending cycle from which DY is the best positioned to benefit given its scale, strong customer relationships, and experience. We are raising our price target to $115 (from $100), which represents 10x our FY17E EV/EBITDA. We reiterate our Outperform rating and believe investors should continue to buy DY shares even with the strong move in the share price following F3Q16 results."

For an analyst ratings summary and ratings history on Dycom Industries click here. For more ratings news on Dycom Industries click here.

Shares of Dycom Industries closed at $72.52 yesterday.

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