UPDATE: BofA Merrill Lynch Downgrades MRC Global to Underperform from Buy, Drops PO to $30.00 from $33.00

In a report published Thursday, Bank of America Merrill Lynch analyst Douglas Becker downgraded MRC Global, Inc. MRC to Underperform from Buy, dropping its price target to $30.00 from $33.00. According to the report, For 2014, analysts are expecting MRC's guidance to bracket $464M consensus EBITDA on its 4Q call, however they see downside risk to street estimates and increasing competition. “We are lowering our 2014/2015 EPS estimates to $1.95/$2.30 from $2.00/$2.40 owing to lower North American revenue and margin expectations,” the report noted. “Our PO declines to $30 from $33 or 13x 2015 EPS estimate. We forecast 6%/5% North American revenue growth based on end market growth. Notably, MRC's customers' capex budgets indicate downside to our Street low estimates. Internationally, we model $904mn revenues in 2014, in line with guidance and 10% growth in 2015. We forecast 9%/14% incremental EBITDA margins for 2014/2015, lower than 13%-14% in 2011/2012, driven by lower revenue growth.” The report further asserted an increase in competition from Marubeni-Itochu Tubulars America, Inc. acquiring oil states' sooner distribution business and Sumitomo's acquisition of Edgen Murray. MRC closed Wednesday at $31.50.