Market Overview

Magnitude Of Chicago Bridge & Iron's Guidance Cut Caught Citi By Surprise

Share:
Magnitude Of Chicago Bridge & Iron's Guidance Cut Caught Citi By Surprise

Although 2016 has been expected to be a tough year for late-cycle oil & gas exposed E&Cs, Citi’s Andrew Kaplowitz expressed surprise at the magnitude of the guidance cut by Chicago Bridge & Iron Company N.V. (NYSE: CBI) for 2Q.

Kaplowitz maintains a Neutral rating on the company, with a price target of $38.

A Cash Story

The analyst mentioned, however, that cash was a meaningful positive, despite the continued weakness in bookings.

“Bottom line is CBI remains a cash story – and the combination of low expectations and continued strong cash performance should support the stock at relatively inexpensive levels even though the re-emergence of nuclear overhang keeps us from being more positive,” Kaplowitz stated.

Related Link: Chicago Bridge & Iron Downgraded By Citi Following Disappointing Westinghouse Deal

Guidance Cut

Chicago Bridge & Iron has lowered its award guidance from $10–$12 billion to $8–$10 billion. Although this is more in line with the already low investor expectations, Kaplowitz believes it still was not overly conservative, implying a relatively material ramp in 2H.

Guidance Achievable

“The low end of the guidance is doable, but CBI probably needs one sizeable $1+ billion award to get there, in our view,” the analyst noted.

The EPS estimate for 2016 has been lowered to $4.85, to reflect that the shortfall in bookings could lead to revenue below the previous estimate.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for CBI

DateFirmActionFromTo
Apr 2018CitigroupMaintainsNeutralNeutral
Dec 2017DA DavidsonDowngradesBuyNeutral
Nov 2017Credit SuisseMaintainsNeutral

View More Analyst Ratings for CBI
View the Latest Analyst Ratings

Posted-In: Andrew Kaplowitz Citi crude Crude OilAnalyst Color Guidance Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (CBI)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
PEPMorgan StanleyReiterates137.0
AZRXH.C. WainwrightMaintains7.0
PEPMacquarieMaintains138.0
POLBuckinghamMaintains36.0
BKBuckinghamMaintains53.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

7 Biggest Price Target Changes For Thursday

Goldman Is Buying Adidas; No Slowdown In Revenue Growth