Orion Marine Group stock target cut, maintains buy on secondary offering

On Friday, B.Riley adjusted its outlook on Orion Marine Group (NYSE: ORN) shares, reducing the company's price target to $9 from the previous $11 while retaining a buy rating on the stock. The revision comes after Orion Marine Group completed a secondary offering of 4.89 million shares at $5.15 each on September 11, 2024, raising $25 million in capital.

The funds from the secondary offering were necessitated by a credit agreement with White Oak, which included a covenant that required Orion Marine Group to execute a liquidity transaction by September 30, 2024. The specified transaction was the sale of the company's East/West Jones property. However, the purchaser of this property requested more time to complete due diligence, potentially delaying the process past the set target date.

The successful capital raise through the secondary offering fulfills the credit amendment's conditions, ensuring that Orion Marine Group avoids penalties that could have included rate step-ups and mandatory monthly prepayments. The lowered price target reflects the dilutive effect of the secondary offering on the company's shares.

B.Riley's maintained buy rating indicates the firm's continued positive stance on Orion Marine Group despite the adjustments made to the price target. The analyst's comments highlight the strategic steps taken by the company to comply with its credit agreement and to secure its financial position without incurring additional penalties.

In other recent news, Orion Group Holdings (NYSE:ORN) has announced the pricing of its public offering of 4,860,000 shares of common stock at $5.15 each, aiming to raise approximately $25 million before expenses. The funds raised are intended for working capital and other general corporate purposes, potentially including debt repayment. Craig-Hallum Capital Group and Roth Capital Partners are managing the offering.

Orion Group Holdings also recently reported its second quarter financial results for 2024, which included a revenue of $192 million and an adjusted EBITDA of $5.5 million. However, due to project delays, the company has revised its annual guidance to a revenue range of $850 million to $900 million and an adjusted EBITDA range of $40 million to $45 million.

Despite these challenges, Orion Group Holdings maintains a strong backlog and awarded work totaling $876 million. The company has secured significant project contracts with Port Everglades, Port Tampa Bay, and Costco Wholesale (NASDAQ:COST), and is actively pursuing additional phases of Costco projects in Florida and Texas. These are some of the recent developments for Orion Group Holdings.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.