How are energy investors positioned?
Tuesday, shares of MRC Global (NYSE:MRC), currently trading at $11.78 with a market capitalization of $1.01 billion, observed movements following Loop Capital’s revision of the company’s price target. Loop Capital analyst Chris Dankert adjusted the price target to $17.00, down from the previous $18.00, while reaffirming a Buy rating on the stock. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis.
Dankert’s commentary highlighted MRC Global’s strategic actions, including the accretive repurchase of its preferred shares, the announcement of the divestiture of its Canadian operations, and the initiation of a $125 million share repurchase program. These steps, supported by the company’s strong financial position with $248 million in levered free cash flow and a healthy current ratio of 1.81, combined with a resurgence in demand and efforts to capture more market share in significant sectors such as gas utility and chemicals, alongside new opportunities in data centers and automated metering, suggest that MRC Global is on track for renewed organic sales growth going into 2025 and beyond.
The analyst pointed out that MRC Global’s strategic initiatives are set to bolster the company’s performance. The divestiture of its Canadian business and the share repurchase program are expected to contribute positively to the company’s financials. The firm is leveraging opportunities in its key markets and exploring new ones, which could enhance its growth prospects.
Despite the positive outlook, the price target was lowered to reflect a "more risk-off environment," suggesting a cautious approach due to potential economic headwinds. However, Loop Capital still sees MRC Global as well positioned to outperform, indicating confidence in the company’s ability to navigate through the challenges. InvestingPro subscribers can access additional insights, including 6 more ProTips and a comprehensive analysis of MRC Global’s financial health, which currently shows a "GOOD" overall rating.
MRC Global’s stock movement on Tuesday will be closely watched by investors, as it aligns with the company’s recent strategic efforts and the adjusted expectations set forth by Loop Capital. The firm’s focus on growth in specific sectors and the implementation of shareholder-friendly initiatives like share repurchases may continue to influence its stock performance in the market.
In other recent news, MRC Global Inc. reported a fourth-quarter loss of $0.14 per share, missing the analyst expectation of a $0.10 profit. The company’s revenue for the quarter was $664 million, falling short of the projected $734.1 million and marking a 10% decrease compared to the previous year. Despite these financial setbacks, MRC Global announced a new joint venture with Frisbie Measurement Services to create IMTEC Services, which will focus on providing smart meter technical services for gas utilities. Additionally, MRC Global has sold its Canadian operations to Emco Corporation as part of its strategy to streamline its portfolio and concentrate on core businesses.
Stifel analysts have maintained a Buy rating for MRC Global with a price target of $16, reflecting confidence in the company’s future prospects despite recent challenges. The analysts noted improvements in daily order rates and backlog during the first quarter of 2025, which the company anticipates will lead to revenue growth beyond typical seasonal patterns in the second quarter. MRC Global’s management clarified that a previously concerning inventory cycle count issue was ultimately non-material. Looking forward, CEO Rob Saltiel expressed optimism for 2025, forecasting revenue growth across all business segments and planning to execute a $125 million share buyback program. These developments are crucial for investors as they monitor MRC Global’s strategic moves and financial health.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.