Tough 2Q Set-Up, Focus On Gas Gen Bookings, End-Market Outlooks; Stay Buy

研报英文原文证据摘录

Tough 2Q Set-Up, Focus On Gas Gen Bookings, End-Market Outlooks; Stay Buy

overruns. To be clear, renewables cost overruns and

corresponding project write-downs not to be understated and a clear risk management breakdown across

the PRIM organization culminating with abrupt leadership changes.

Still see value even after adjusting for execution risks and other fundamentals but will take more than just

one quarter of in-line financial results and management execution meeting already weak expectations for

any sort of confidence rebound.

We perceive a serious hit to management credibility given the cadence of initially guiding down renewables

tacitly in 4Q25, then reaffirming a bullish outlook to start the year, and then ultimately more meaningfully

guiding down around the same renewable concerns on two consecutive updates.

PRIM squarely in the “penalty box”. Once renewables issues clearly in the rearview mirror and gas gen

continues to emerge as the next growth driver already materializing with $2Bn of new bookings in 2Q,

we can see relative discount narrowing to our 30% risk-adjustment relative valuation discount. See future

stock performance contingent on execution over the next 12 months. Also, look for corporate buybacks

with $100Mn available under the share repurchase program (as of June) with only $50Mn repurchased

during 2Q. See shares at current levels more than adequately reflective of risks and the lingering concerns

while other end-markets exhibit strength and momentum carrying into FY27 to likely represent a new base

for growth. PRIM to benefit from accelerating infrastructure tailwinds across numerous power, energy,

communications, electrical and other end-markets (ex-renewables) with a skilled workforce (~18,500)

throughout the U.S.