UPDATE: D.A. Davidson Reiterates Neutral Rating, Lowers PT on Mistras Group as Lower Margins Impact Results

In a report published Thursday, D.A. Davidson analyst Tristan Richardson reiterated a Neutral rating on Mistras Group (NYSE: MG), but lowered the price target from $24.00 to $19.00.In the report, D.A. Davidson noted, “We are adjusting our EBITDA projections slightly for the remainder of the year to incorporate the slight variance from expectations in Q1, further timing risk of new work and margin initiatives, only partly offset by contributions from the company's recent acquisition of NACHER; we have shifted some of the expected growth from FY15 to FY16. Although Mistras has proven its ability to achieve topline growth and capture new work opportunities amidst a healthy macro-environment for energy infrastructure in North America, the timing of an improvement in margins given this apparent growth is uncertain. We are reducing our target from $24 to $19, or 9x CY15 EV/EBITDA. The shares have likely overreacted to the results announced today, but we see only modest upside to our revised target. We rate the shares NEUTRAL.”Mistras Group closed on Wednesday at $17.35.