UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on The Shaw Group
In a report published Monday, J.P. Morgan & Co. reiterated its Neutral rating on The Shaw Group (NYSE: SHAW), and slightly raised its price target from $46.00 to $47.00.
J.P. Morgan noted, “After Friday's close, SHAW reported operating EPS of $0.44, above our $0.41 estimate and the Street's $0.39 (GAAP EPS of $1.03 included a favorable FX mark-to market on the company's yen bonds). Revenue was 2% below our forecast, though this was offset by 40bps of upside to our EBITDA margin forecast, driven by gross margin (SG&A was in-line). OCF was-$184mn, though this left SHAW's unrestricted cash balance at ~$1.2bn, well above the minimum of $800mm necessary to complete the merger with CBI. We maintain our prior FY13-14E EPS (our FY13E EPS is toward the midpoint of prior guidance). Backlog was $16.3bn, -4% Q/Q, implying Q1 book-to-bill of 0.63x (after excluding a $200mn reduction in future scope on a multi-year US govt. contract).”
The Shaw Group closed on Friday at $46.55.
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