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UPDATE: Bank Of America Reiterates On MRC Global On Lowered EPS Estimates

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In a report published Monday, Bank of America analyst Vaibhav Vaishnav reiterated a Neutral rating on MRC Global (NYSE: MRC), but lowered the price target from $31.00 to $28.00.

In the report, Bank of America noted, “MRC Global (MRC) is aggressively trying to replace revenues from its top midstream customers through offering low margin line pipe to new customers and then ‘upselling' higher margin products six-to-nine months later as sales to top midstream line pipe customers have not rebounded as expected. Accordingly, the company increased its 2014 revenues guidance but lowered EBITDA guidance by 2% from unfavorable mix.

"We are maintaining our 2014/2015E EPS at $1.66/$2.10. Notably, our 2014E EPS is 4% below the consensus estimate. Our PO declines to $28 from $30 as we lower our target multiple to 13x from 14x reflecting lower returns. Increasing activity and bottoming of pricing in line pipe provides a positive read through for NOW Inc. as the shift in mix is a company specific issue for MRC.”

MRC Global closed on Friday at $25.68.

Latest Ratings for MRC

May 2015JP MorganInitiates Coverage onOverweight
May 2015Stephens & Co.UpgradesEqual-weightOverweight
Feb 2015BairdDowngradesOutperformNeutral

View More Analyst Ratings for MRC
View the Latest Analyst Ratings

Posted-In: Bank of America Vaibhav VaishnavAnalyst Color Price Target Analyst Ratings


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