McDermott International (MDR) Raised to “Hold” at Zacks Investment Research
McDermott International (NYSE:MDR) was upgraded by Zacks Investment Research from a “sell” rating to a “hold” rating in a research report issued to clients and investors on Monday.
According to Zacks, “We appreciate McDermott’s broad product portfolio, diversified geographical footprint, good market position and strong relationship with national oil companies. MDR's $6 billion merger deal with Chicago Bridge & Iron bode well as it will lead to a fully integrated onshore-offshore company. The increased scale and diversification will also boost its growth prospects and lead to cost efficiencies. However, even though the merger adds onshore services to the company, a considerable portion of MDR’s current backlog is still associated with offshore operations, and thus remains susceptible to the pricing weakness. Further, with the merger, MDR will also end up assuming the high debt load of Chicago Bridge and Iron. Therefore, even though MDR in itself displays strong financials, the post merger entity will carry a debt load of around $2 billion which could mar its credit metrics. Thus we take a cautious stance on the stock.”
Several other research analysts also recently weighed in on the stock. Morgan Stanley reissued a “sell” rating on shares of McDermott International in a research report on Wednesday, December 20th. ValuEngine downgraded shares of McDermott International from a “strong-buy” rating to a “buy” rating in a research report on Wednesday, November 15th. KeyCorp reaffirmed a “hold” rating on shares of McDermott International in a research report on Friday, November 10th. UBS Group boosted their price objective on shares of McDermott International from $7.00 to $7.50 and gave the company a “neutral” rating in a research report on Friday, November 3rd. Finally, Credit Suisse Group lowered their price objective on shares of McDermott International from $7.60 to $7.30 and set a “neutral” rating on the stock in a research report on Thursday, November 2nd. Two investment analysts have rated the stock with a sell rating, six have given a hold rating and four have issued a buy rating to the stock. McDermott International presently has an average rating of “Hold” and a consensus price target of $7.59.
McDermott International (NYSE:MDR) last released its earnings results on Wednesday, November 1st. The oil and gas company reported $0.33 earnings per share for the quarter, topping the consensus estimate of $0.19 by $0.14. The business had revenue of $958.50 million for the quarter, compared to the consensus estimate of $977.28 million. McDermott International had a net margin of 5.25% and a return on equity of 9.56%. The firm’s quarterly revenue was up 71.6% compared to the same quarter last year. During the same period last year, the firm posted $0.09 earnings per share. research analysts predict that McDermott International will post 0.53 earnings per share for the current fiscal year.
A number of institutional investors and hedge funds have recently made changes to their positions in MDR. Schwab Charles Investment Management Inc. grew its position in McDermott International by 4.0% in the second quarter. Schwab Charles Investment Management Inc. now owns 2,778,286 shares of the oil and gas company’s stock worth $19,921,000 after acquiring an additional 107,473 shares in the last quarter. Federated Investors Inc. PA grew its position in McDermott International by 2.0% in the second quarter. Federated Investors Inc. PA now owns 23,565 shares of the oil and gas company’s stock worth $169,000 after acquiring an additional 468 shares in the last quarter. Swiss National Bank grew its position in McDermott International by 3.3% in the second quarter. Swiss National Bank now owns 408,700 shares of the oil and gas company’s stock worth $2,930,000 after acquiring an additional 13,200 shares in the last quarter. State of Tennessee Treasury Department bought a new stake in McDermott International in the second quarter worth approximately $851,000. Finally, JPMorgan Chase & Co. grew its position in McDermott International by 219.1% in the second quarter. JPMorgan Chase & Co. now owns 2,777,153 shares of the oil and gas company’s stock worth $19,912,000 after acquiring an additional 1,906,741 shares in the last quarter. 86.10% of the stock is currently owned by hedge funds and other institutional investors.
About McDermott International
McDermott International, Inc is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects.
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