UPDATE: Goldman Sachs Resumes McDermott International at Neutral Awaiting Sustainable Margin Growth

In a report published Wednesday, Goldman Sachs analyst Michael Cerasoli resumed coverage on McDermott International MDR with a Neutral rating and $10.00 price target.

In the report, Goldman Sachs noted, “We resume coverage of McDermott (MDR) with a Neutral rating. We see global offshore investment rising near term as upstream companies continue big budget projects, but are less positive on MDR given its shallow water legacy, recent execution struggles, and lack of scale. We believe as oil/gas prices stabilize, MDR's success will hinge on its ability to improve its access, assets, and project execution. While MDR is moving in the right direction, we think investors should wait for confirming evidence via sustainable margin growth, an area where our earnings model gives MDR little credit. Our $10 12-month target implies 16% upside (group: 27%).”

McDermott International closed on Tuesday at $8.61.