D.A. Davidson Warns Of An Expected Lumpy Recovery In Orion Marine Group

D.A. Davidson’s John B. Rogers believes Orion Group Holdings Inc ORN, formerly known as Orion Marine Group, could see improved market growth visibility over the next 12 to 18 months.

Rogers maintains a Neutral rating on the company, while raising the price target from $6 to $8.

Improving Scenario

“Local, state, and federal funding initiatives aimed at increasing spending on transportation infrastructure should improve opportunities for work on marine transportation and other infrastructure in markets served by Orion’s marine construction business,” the analyst mentioned.

Related Link: FBR Capital Upgrades Orion Group Holdings To Outperform

Rogers also expects the ongoing recovery in oil and gas prices to improve market prospects for work in Texas, as well as along the Gulf coast, for both marine operations and concrete construction.

Lumpy Recovery

However, the earnings estimates for the company have been left unchanged and are at the lower end of the consensus expectations and below the guidance for 2017.

“Our estimates reflect the inherent volatility and timing risks associated with the company’s work. Recent storm activity will likely have an impact on productivity in Q4 2016,” the analyst stated.

Rogers expects Orion Group to return to profitability in 2016 and then grow its earnings over the next several years.

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