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Primoris' (PRIM) $260M Solar Deal to Aid Energy/Renewables Arm

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Shares of Primoris Services Corporation PRIM gained 5.53% in the after-hours trading session on Jun 23 after the announcement of a solar project contract. The contract, worth $260 million, was won by the Energy/Renewables segment.

This engineering, procurement and construction services work for a utility-scale solar facility in the South will begin in third-quarter 2022 and is expected to finish in fourth-quarter 2023.

Tom McCormick, president and chief executive officer of PRIM, stated, “The organic growth of our utility-scale solar business is one measure of the success of our energy transition strategy. With over 3,200 megawatts of solar power projects under construction currently in 2022, Primoris ranks as one of the leading EPC contractors in the space. This contract brings our year-to-date total of new solar business to more than half of a billion dollars.”

Energy/Renewables’ Continuous Contract Flow: A Boon

Primoris — a Zacks Rank #2 (Buy) company — has been reaping benefits from strong project execution under the Energy/Renewables segment, which accounts for 45.8% of first-quarter revenues. In May, Primoris won two solar projects worth $130 million and $120 million. In April, it received two projects with a combined value of more than $155 million in Texas and Florida.

It is to be noted that solar projects continue to drive the Energy/Renewables segment. This segment’s revenues increased 2%, backed by increased renewable energy activity, partially offset by lower activity on industrial projects in 2022. Segment’s total backlog at March-end was $2,433 million compared with $1,386 million a year ago.

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Shares of this leading specialty contractor have outperformed the Zacks Building Products - Heavy Construction industry year to date. The company has been benefiting from solid performance across the two segments — Utility and Energy/Renewables. Biden’s renewable energy drive is expected to boost the growth of the company.

Other Top-Ranked Stocks in the Construction Sector

Sterling Construction Company, Inc. STRL — a Zacks Rank #2 company — has been benefiting from broad-based growth across the E-Infrastructure, Building and Transportation solutions segments.

The consensus mark for Sterling’s 2022 earnings has remained stable at $2.88 per share over the past 30 days. This suggests 34% year-over-year growth.

Granite Construction Inc. GVA — a Zacks Rank #2 company — is the largest diversified infrastructure companies in the United States. The company has been banking on strategic initiatives, inorganic moves and strong bidding activity.

Earnings estimates for 2022 have increased to $2.11 per share from $1.97 in the past 60 days. Earnings for the current year are expected to climb 17.2% year over year.

AECOM ACM — carrying a Zacks Rank #2 — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and environmental, energy and water businesses.

AECOM’s expected earnings growth rate for 2022 is 21.6%. The consensus mark for its 2022 earnings moved up to $3.43 per share from $3.40 in the past 60 days.

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