KeyBanc Capital Markets Reiterates McDermott International (MDR) Buy Rating

KeyBanc Capital Markets analysts Tahira Afzal, Matt Tucker and Mark Aydin reiterated their Buy rating for shares of McDermott International, Inc. (NYSE: MDR) with a price target of $33.

Following the McDermott International 4th quarter 2009 earnings call, the analysts lowered their 2010 earnings per share estimate from $2.17 to $2.10 but were still largely positive about the company's prospects.

The KeyBanc Capital Markets analysts wrote that there was an "incrementally more confident tone on J Ray margins in 2010, an important positive – management appeared more comfortable with J Ray margins being in the 10-12% range in 2010 despite prospects of a lighter revenue line. We consider this to be an important positive given management's more cautious tone on 3Q09, which raised some investor concern. Further, our scenario analysis indicates sizeable EPS upside if J Ray can deliver one quarter with a clean margin similar to that seen in 4Q09 (excluding Qatar projects)."