Analyst Alexander Waters from Bank of America Securities reiterated a Buy rating on Dycom and increased the price target to $310.00 from $299.00.
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Alexander Waters has given his Buy rating due to a combination of factors that position Dycom to benefit significantly from the Broadband Equity, Access, and Deployment (BEAD) program. This initiative, which aims to bridge the digital divide in rural areas, is expected to provide a substantial boost to the telecom construction sector, with Dycom potentially capturing a significant portion of the projected $15-17 billion market. Waters anticipates that Dycom could see a revenue increase of approximately $3.0-3.5 billion and an adjusted EBITDA of $350-400 million over the program’s duration.
Furthermore, Dycom’s established expertise and strong relationships with major telecom operators like AT&T, Charter, and Verizon enhance its position as a preferred provider in federally funded projects. The company’s involvement in expanding fiber-to-the-home initiatives and data center opportunities, coupled with clarity on BEAD funding, adds to the positive outlook. These factors, along with the expected durability of other growth vectors, have led Waters to increase the price objective to $310, indicating an 8% upside potential and reinforcing Dycom as a top pick in the small to mid-cap category.
In another report released on September 26, Wells Fargo also maintained a Buy rating on the stock with a $305.00 price target.