D.A. Davidson Downgrades Furmanite As Stock Falls 18%

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D.A. Davidson & Co. on Monday downgraded Furmanite Corporation FRM from Buy to Neutral and lowered its price target from $11 to $8.50 after the company reported disappointing earnings.

Analyst Tristan Richardson noted that Q3 “Earnings of $0.03 per share were sharply below our $0.14 estimate and consensus of $0.12 per share. Revenue declined 13 percent in the company’s U.S. Technical Services business and margins were well below expectations, driving most of the variance.

“EMEA was also lower than expected, while Asia-Pac reported in line results. Additionally, earnings were negatively impacted by a $0.02 per share compensation expense associated with the CEO Charlie Cox’s announced retirement.”

Richardson concluded by reducing projections for “FY14 and FY15 to reflect the Q3 variance as well as generally lower visibility, particularly in the company’s legacy Technical Services business. Although the company’s Technical Services provides essential maintenance functions for pressure piping facilities to operate at safe and efficient levels, the volatility and lack of visibility in customer activity gives us pause.”

The stock dropped well below the firm’s new price target, falling to $6.13, a decline of 18.05 percent.

Posted In: Analyst ColorDowngradesPrice TargetAnalyst RatingsD.A. Davidson & Co.Tristan Richardson
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