PRIM: Modeling the Path Through the Renewables Reset

Research evidence excerpt

PRIM: Modeling the Path Through the Renewables Reset

May 18, 2026

Key Highlights

Operational priority remains renewables execution and risk control.

Management’s near-term focus is on completing the challenged

renewables projects, validating the remaining portfolio, and strengthening

processes to reduce recurrence risk. The company said its estimating,

bidding, and support structure has been materially strengthened since

2H24, with a ~40% increase in support resources and the addition of

more experienced personnel in estimating and pre-construction planning.

Management has also brought in outside resources to review processes and

procedures as the business scales. A recent decision to walk away from a

project due to unacceptable contract terms was cited as an early sign of

improved bidding discipline.

The demand backdrop remains constructive and should not be

overshadowed by the near-term renewables reset, in our view.

Management continued to point to a healthy funnel across Energy,

including ~$2.6B of verbal awards, with ~$1.1B in solar, $800M in natural

gas generation, and additional pipeline awards expected to convert. Energy

book-to-bill is expected to be close to 1x in 2Q, well above 1x in 3Q, and

likely around 1.1x-1.2x for the full year. Looking into 2027, management

viewed our $8.5B revenue framework as achievable, supported by delayed

renewables revenue moving out of 2026, incremental full-year PayneCrest

contribution, pipeline growth, and natural gas generation activity.

Management also addressed capital allocation and the existing share

repurchase authorization. While the company did not commit to a specific

level or timing of buybacks, management noted that the authorization

runs through 2028 and is intended to support opportunistic repurchases.