UPDATE: JP Morgan Initiates Neutral, $14.50 PT on McDermott International
JP Morgan initiates its coverage on McDermott International (NYSE: MDR) with a Neutral rating and a price target of $14.50 as it believes the company's risks match its substantial upside potential.
JP Morgan says, "We're initiating coverage of MDR, an asset-intensive E&C pure play on the offshore oil & gas market (which we believe offers substantial prospects for growth, fueled by deepwater), with a Neutral rating and $14.50 December 2012 price target. While valuation is tempting given the growing bid funnel, uncertainties regarding 1) the timing of a profit revival in the Atlantic (given low utilization rates and recent project challenges), and 2) MDR's ability to meet 2013 consensus expectations, remain substantial, in our view."
MDR closed at $11.88 on Monday.
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