McDermott International (MDR) Stock Rating Reaffirmed by Zacks Investment Research
McDermott International (NYSE:MDR)‘s stock had its “sell” rating restated by Zacks Investment Research in a report released on Tuesday.
According to Zacks, “Concerned about the high debt load which McDermott has ended up assuming post its merger with Chicago Bridge &Iron, the investment thesis of MDR has been downgraded from 'Hold' to 'Sell'. In fact, post the merger with Chicago Bridge, the leverage metrics of the company have increased to 51.5% which restricts the financial flexibility. To make matters worse, the company expects to generate negative free cash flow of $430-$450 million for the rest of 2018. Lack of new deepwater drilling orders is starting to haunt the subsea part of the industry. As such, with a considerable portion of MDR’s current backlog associated with offshore operations, it remains susceptible to the pricing weakness. Thus McDermott is viewed as a risky bet which should be avoided for the time being.”
Several other analysts also recently commented on MDR. KeyCorp reduced their price objective on shares of McDermott International from $42.00 to $38.00 and set a “$17.66” rating for the company in a research report on Monday, July 23rd. Citigroup reduced their price objective on shares of McDermott International from $27.00 to $21.00 and set a “$17.66” rating for the company in a research report on Monday, July 23rd. ValuEngine raised shares of McDermott International from a “strong sell” rating to a “sell” rating in a research report on Thursday, August 2nd. Credit Suisse Group reduced their price target on shares of McDermott International from $25.00 to $23.00 and set a “neutral” rating for the company in a research report on Monday, August 13th. Finally, TheStreet downgraded shares of McDermott International from a “b-” rating to a “c+” rating in a research report on Wednesday, October 24th. Three investment analysts have rated the stock with a sell rating, three have given a hold rating and one has given a buy rating to the company. The stock currently has an average rating of “Hold” and an average price target of $25.32.
McDermott International (NYSE:MDR) last released its earnings results on Tuesday, October 30th. The oil and gas company reported $0.20 earnings per share for the quarter, missing analysts’ consensus estimates of $0.29 by ($0.09). The firm had revenue of $2.29 billion for the quarter, compared to analyst estimates of $2.50 billion. McDermott International had a net margin of 2.05% and a return on equity of 8.40%. The business’s revenue for the quarter was up 138.7% compared to the same quarter last year. During the same period in the prior year, the company posted $0.33 EPS. Research analysts predict that McDermott International will post 1.03 EPS for the current year.
In related news, CEO David Dickson acquired 39,800 shares of the company’s stock in a transaction on Tuesday, November 6th. The shares were acquired at an average cost of $9.96 per share, for a total transaction of $396,408.00. Following the purchase, the chief executive officer now owns 459,889 shares in the company, valued at $4,580,494.44. The acquisition was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CFO Stuart Spence acquired 25,000 shares of the company’s stock in a transaction on Tuesday, November 6th. The shares were bought at an average price of $9.98 per share, for a total transaction of $249,500.00. Following the completion of the purchase, the chief financial officer now owns 141,961 shares in the company, valued at approximately $1,416,770.78. The disclosure for this purchase can be found here. Over the last 90 days, insiders have acquired 127,300 shares of company stock worth $1,255,068. Company insiders own 0.80% of the company’s stock.
A number of large investors have recently modified their holdings of the business. BlackRock Inc. raised its stake in shares of McDermott International by 4.4% during the 3rd quarter. BlackRock Inc. now owns 21,091,651 shares of the oil and gas company’s stock worth $388,719,000 after purchasing an additional 896,997 shares during the period. Dimensional Fund Advisors LP raised its stake in McDermott International by 3.7% in the 3rd quarter. Dimensional Fund Advisors LP now owns 8,965,821 shares of the oil and gas company’s stock valued at $165,240,000 after acquiring an additional 317,427 shares during the period. Renaissance Technologies LLC bought a new stake in McDermott International in the 2nd quarter valued at about $37,690,000. LSV Asset Management raised its stake in McDermott International by 0.7% in the 3rd quarter. LSV Asset Management now owns 5,977,149 shares of the oil and gas company’s stock valued at $110,158,000 after acquiring an additional 40,221 shares during the period. Finally, Luminus Management LLC bought a new stake in McDermott International in the 2nd quarter valued at about $45,791,000. Institutional investors and hedge funds own 87.61% of the company’s stock.
About McDermott International
McDermott International, Inc provides engineering, procurement, construction and installation, front-end engineering and design, and module fabrication services for upstream field developments. It operates through three segments: the Americas, Europe and Africa; the Middle East; and Asia. 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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