Back to top

Analyst Blog

Zacks Investment Research downgraded MRC Global Inc. (MRC - Analyst Report) to a Zacks Rank #4 (Sell) on Mar 19 on a weak earnings outlook for 2013, despite reporting better- than-expected results in the fourth quarter of 2012.

Why the Downgrade?

MRC Global has witnessed sharp downward estimate revisions after guiding for lower than expected earnings for 2013. MRC expects earnings in the range of $2.10 to $2.35 per share in 2013, which was below the Zacks Consensus Estimate of $2.43 at the time of earnings announcement. Although the guidance was higher compared to the 2012 levels, it missed the market expectations, and, therefore, most of the estimates were revised downwards subsequently.

The Zacks Consensus Estimate for 2013 decreased 8.5% to $2.27 per share over the last 30 days, due to a downward revision of more than 85% of the estimates. For 2014 also, a number of estimates were revised downward over the same timeframe, sinking the Zacks Consensus Estimate by 3.5% to $2.73 per share.

Moreover, MRC Global’s upstream segment which experienced a year-over-year decline in the fourth quarter of 2012 due to the planned slowdown in the Oil Country Tubular Goods (OCTG) product line is expected to face the same turbulence in the coming quarters.

Other Stocks to Consider

The following machinery tools companies with favorable Zacks Rank are performing well and are worth considering.

  1. Valmont Industries Inc. (VMI - Analyst Report) carries a Zacks Rank #1 (Strong Buy)
  2. Proto Labs Inc. (PRLB - Snapshot Report) carries a Zacks Rank #2 (Buy)
  3. Actuant Corporation (ATU - Analyst Report) carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.