Shares of infrastructure construction company MasTec, Inc. (NYSE:MTZ) jumped as much as 11% on Tuesday after an analyst increased its price target on the stock. As of 3 p.m. EST shares were still up 10.9% on the day.
On the trading front, Citigroup put a price target of $38 per share on MasTec's stock on Tuesday, but maintained a neutral rating. Ironically, the stock jumped well past that number.
What may have driven investors into a buying frenzy was word that Senate Democrats have proposed a $1 trillion transportation and infrastructure bill that they're hoping will spur job growth. It's an area President Donald Trump has promised spending, so there could be some common ground between the proposal and the White House.
Tuesday's proposal sounds good on paper and may be driving MasTec's shares higher. It's a long way from reality, so some caution is needed. Senate Democrats are really trying to set the groundwork for negotiation and it's unlikely a bill gets passed anytime soon. Even if it does, the spending figure is over 10 years, so there will be a long lag between a bill and funds flowing to MasTec. The talk of more spending is good for the stock long term, but Tuesday's pop may fade if the spending bill stalls, so I wouldn't get too excited about the speculation currently driving shares.