UPDATE: Morgan Stanley Initiates Underweight on MRC Global

Morgan Stanley initiates its coverage on MRC Global

with an Underweight rating. Morgan Stanley says, "MRC … derives just 50% of its US upstream and midstream from shales, with minimal offshore exposure. …While there are no direct comps to … MRC, we used industrial distributors with similar margin profiles and cyclicality, which have historically traded at an average multiple of 7.5x 12-mo forward EBITDA. We value MRC at $27 (30% upside) by applying a multiple of 7x, a modest discount due to MRC's higher debt profile." MRC closed at $20.15 on Tuesday.