McDermott International (NYSE:MDR) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report issued on Monday, January 8th.
According to Zacks, “Concerned about the high debt load which McDermott will end up assuming post its merger with Chicago Bridge &Iron, we are downgrading our investment thesis of MDR from 'Hold' to 'Sell'. Chicago Bridge carries high massive debt due to imprudent acquisition decisions in the past. Though MDR in itself displays strong financials, post merger the new entity will carry a debt load of around $2 billion which could mar its credit metrics. Further, MDR is also witnessing lumpiness in its backlog position which has dipped around 38.4% year-over-year. Lack of new deepwater drilling orders are starting to haunt the subsea part of the industry. As such, with a considerable portion of MDR’s current backlog associated with offshore operations, it remains susceptible to the pricing weakness. Thus we view McDermott as a risky bet which should be avoided for the time being.”
MDR has been the topic of several other reports. ValuEngine raised McDermott International from a “buy” rating to a “strong-buy” rating in a research report on Monday, November 6th. UBS Group upped their price objective on McDermott International from $7.00 to $7.50 and gave the company a “neutral” rating in a research report on Friday, November 3rd. Deutsche Bank lowered their price target on McDermott International from $6.50 to $5.25 and set a “hold” rating on the stock in a report on Tuesday, October 24th. Morgan Stanley reissued a “sell” rating on shares of McDermott International in a report on Wednesday, December 20th. Finally, KeyCorp reissued a “hold” rating on shares of McDermott International in a report on Friday, October 6th. Three research analysts have rated the stock with a sell rating, five have given a hold rating and four have given a buy rating to the company. The stock currently has an average rating of “Hold” and an average target price of $7.93.
McDermott International (NYSE:MDR) opened at $8.25 on Monday. The stock has a market capitalization of $2,340.00, a P/E ratio of 15.57 and a beta of 1.58. McDermott International has a 12-month low of $5.56 and a 12-month high of $9.07. The company has a debt-to-equity ratio of 0.30, a current ratio of 1.70 and a quick ratio of 1.70.
McDermott International (NYSE:MDR) last released its quarterly earnings data on Wednesday, November 1st. The oil and gas company reported $0.33 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.19 by $0.14. The business had revenue of $958.50 million for the quarter, compared to analysts’ expectations of $977.28 million. McDermott International had a return on equity of 9.56% and a net margin of 5.25%. The firm’s quarterly revenue was up 71.6% on a year-over-year basis. During the same period in the prior year, the firm posted $0.09 EPS. equities analysts anticipate that McDermott International will post 0.61 earnings per share for the current fiscal year.
Several hedge funds and other institutional investors have recently added to or reduced their stakes in the company. BlackRock Inc. lifted its holdings in shares of McDermott International by 109.1% during the 2nd quarter. BlackRock Inc. now owns 35,201,940 shares of the oil and gas company’s stock valued at $252,397,000 after buying an additional 18,363,073 shares during the period. Vanguard Group Inc. raised its holdings in McDermott International by 31.0% in the 2nd quarter. Vanguard Group Inc. now owns 30,112,732 shares of the oil and gas company’s stock worth $215,909,000 after purchasing an additional 7,129,111 shares during the period. Dimensional Fund Advisors LP raised its holdings in McDermott International by 10.3% in the 3rd quarter. Dimensional Fund Advisors LP now owns 23,082,635 shares of the oil and gas company’s stock worth $167,811,000 after purchasing an additional 2,151,895 shares during the period. State Street Corp raised its holdings in McDermott International by 37.3% in the 2nd quarter. State Street Corp now owns 8,384,938 shares of the oil and gas company’s stock worth $60,118,000 after purchasing an additional 2,277,274 shares during the period. Finally, Hotchkis & Wiley Capital Management LLC raised its holdings in McDermott International by 5.7% in the 2nd quarter. Hotchkis & Wiley Capital Management LLC now owns 7,980,706 shares of the oil and gas company’s stock worth $57,222,000 after purchasing an additional 427,908 shares during the period. 85.17% of the stock is currently owned by hedge funds and other institutional investors.
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McDermott International Company Profile
McDermott International, Inc is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects.
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