McDermott International (NYSE:MDR) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Monday.

According to Zacks, “Concerned about the high debt load which McDermott will end up assuming post its merger with Chicago Bridge &Iron, we are downgrading our investment thesis of MDR from 'Hold' to 'Sell'. Chicago Bridge carries high massive debt due to imprudent acquisition decisions in the past. Though MDR in itself displays strong financials, post merger the new entity will carry a debt load of around $2 billion which could mar its credit metrics. Further, MDR is also witnessing lumpiness in its backlog position which has dipped around 38.4% year-over-year. Lack of new deepwater drilling orders are starting to haunt the subsea part of the industry. As such, with a considerable portion of MDR’s current backlog associated with offshore operations, it remains susceptible to the pricing weakness. Thus we view McDermott as a risky bet which should be avoided for the time being.”

Other equities analysts also recently issued research reports about the company. Scotiabank reiterated a “buy” rating and issued a $9.00 price objective on shares of McDermott International in a report on Wednesday, November 1st. Deutsche Bank decreased their price objective on McDermott International from $6.50 to $5.25 and set a “hold” rating for the company in a report on Tuesday, October 24th. KeyCorp reiterated a “hold” rating on shares of McDermott International in a report on Friday, October 6th. ValuEngine upgraded McDermott International from a “buy” rating to a “strong-buy” rating in a report on Monday, November 6th. Finally, Morgan Stanley restated a “sell” rating on shares of McDermott International in a report on Wednesday, December 20th. Three research analysts have rated the stock with a sell rating, five have assigned a hold rating and four have given a buy rating to the stock. The company has a consensus rating of “Hold” and an average target price of $7.59.

McDermott International (NYSE MDR) traded up $0.06 on Monday, reaching $7.52. The company’s stock had a trading volume of 6,350,000 shares, compared to its average volume of 5,550,000. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.70 and a current ratio of 1.70. The company has a market capitalization of $2,140.00, a P/E ratio of 14.19 and a beta of 1.35. McDermott International has a twelve month low of $5.56 and a twelve month high of $8.33.

McDermott International (NYSE:MDR) last posted its quarterly earnings data on Wednesday, November 1st. The oil and gas company reported $0.33 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.19 by $0.14. The business had revenue of $958.50 million during the quarter, compared to the consensus estimate of $977.28 million. McDermott International had a return on equity of 9.56% and a net margin of 5.25%. The firm’s quarterly revenue was up 71.6% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.09 earnings per share. sell-side analysts predict that McDermott International will post 0.53 EPS for the current fiscal year.

Large investors have recently modified their holdings of the company. Private Advisor Group LLC bought a new position in shares of McDermott International during the second quarter valued at $106,000. Cubist Systematic Strategies LLC bought a new position in shares of McDermott International during the third quarter valued at $112,000. Meeder Asset Management Inc. increased its holdings in shares of McDermott International by 234.0% during the third quarter. Meeder Asset Management Inc. now owns 16,144 shares of the oil and gas company’s stock valued at $117,000 after acquiring an additional 11,310 shares in the last quarter. Koch Industries Inc. increased its holdings in shares of McDermott International by 711.3% during the second quarter. Koch Industries Inc. now owns 164,323 shares of the oil and gas company’s stock valued at $144,000 after acquiring an additional 144,069 shares in the last quarter. Finally, Federated Investors Inc. PA increased its holdings in shares of McDermott International by 2.0% during the second quarter. Federated Investors Inc. PA now owns 23,565 shares of the oil and gas company’s stock valued at $169,000 after acquiring an additional 468 shares in the last quarter. Hedge funds and other institutional investors own 86.00% of the company’s stock.

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About McDermott International

McDermott International, Inc is a provider of integrated engineering, procurement, construction and installation (EPCI), front-end engineering and design (FEED) and module fabrication services for upstream field developments across the world. The Company delivers fixed and floating production facilities, pipeline installations and subsea systems from concept to commissioning for offshore and subsea oil and gas projects.

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