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Investing.com - Stifel raised its price target on MRC Global (NYSE:MRC) to $17.00 from $15.00 on Thursday, while maintaining a Buy rating on the stock. The stock, currently trading at $13.32, shows potential upside according to InvestingPro analysis, which indicates the company is currently undervalued with strong financial health metrics.
The price target increase follows MRC Global’s announcement that it has signed an agreement to be acquired by DNOW (NYSE:DNOW) in an all-stock transaction. The deal values the combined company at approximately $3.0 billion, according to Stifel. MRC Global brings significant value to the deal with its $2.95 billion in revenue and robust liquidity position, as evidenced by its healthy current ratio of 1.68.
DNOW expects to generate $70 million of annual cost synergies by the third year following the anticipated close of the transaction. The deal is expected to be completed in the fourth quarter of 2025.
The acquisition is projected to be 25% accretive to DNOW’s earnings per share in 2026, Stifel noted in its analysis of the transaction.
Stifel continues to maintain its Buy rating on MRC Global shares following the announcement of the acquisition agreement.
In other recent news, MRC Global has announced a definitive merger agreement with DNOW Inc. in an all-stock transaction valued at approximately $1.5 billion, including MRC Global’s net debt. This merger aims to create a leading energy and industrial solutions provider, with a combined global footprint across more than 350 service and distribution locations in over 20 countries. Under the agreement, MRC Global shareholders will receive 0.9489 shares of DNOW common stock for each MRC Global share, representing an 8.5% premium to MRC Global’s 30-day volume-weighted average price. The merger is expected to close in the fourth quarter of 2025, pending shareholder and regulatory approvals.
In other developments, MRC Global reported its financial results for the first quarter of 2025, missing earnings expectations. The company posted earnings per share of $0.14, below the forecasted $0.22, and revenue of $712 million, which was also below the anticipated $763.93 million. Despite this, MRC Global launched a new joint venture, MTech Services, and expanded into data centers. Additionally, MRC Global shareholders recently approved director elections and several key proposals, including an advisory vote on executive compensation and the appointment of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025.
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