Now Inc price target raised to $19 from $17 at Stifel on MRC deal

Investing.com - Stifel raised its price target on Now Inc (NYSE:DNOW) to $19.00 from $17.00 on Friday, while maintaining a Buy rating on the stock following the company’s acquisition announcement. According to InvestingPro data, DNOW demonstrates strong financial health with a "GREAT" overall score, holding more cash than debt on its balance sheet.

Now Inc revealed Thursday that it has signed an agreement to acquire MRC Global (NYSE:MRC) in an all-stock transaction that values the combined company at approximately $3.0 billion. DNOW, currently trading at $15.06, appears undervalued according to InvestingPro’s Fair Value analysis, with the company maintaining a healthy current ratio of 2.32x.

The transaction is anticipated to close in the fourth quarter of 2025, according to details provided in Stifel’s research note.

Now Inc expects to generate $70 million of annual cost synergies by the third year following the completion of the acquisition.

The company projects 25% earnings per share accretion in 2026 as a result of the merger, supporting Stifel’s continued Buy recommendation on the stock.

In other recent news, DNOW Inc. reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.22 compared to a forecast of $0.18. The company also reported revenue of $599 million, surpassing projections of $587.75 million. Despite these positive results, DNOW’s stock experienced a decline, possibly due to market uncertainties and concerns over potential rig count reductions. In a significant development, DNOW announced a definitive merger agreement to acquire MRC Global in an all-stock transaction valued at approximately $1.5 billion, including MRC Global’s net debt. This merger is expected to create a leading energy and industrial solutions provider with a vast global presence. Furthermore, the merger is anticipated to deliver double-digit adjusted EPS accretion in the first year, with $70 million in annual cost synergies projected within three years. The boards of directors of both companies have unanimously approved the merger, which is expected to close in the fourth quarter of 2025, pending shareholder and regulatory approvals.

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