On July 11, Zacks Investment Research upgraded
Chicago Bridge & Iron
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Strong order activity coupled with rising demand for energy
infrastructure, especially in the liquefied natural gas (LNG),
gas processing and oil sands markets across the world, are
expected to lead to a positive earnings surprise in the upcoming
The surge in shale gas revolution in North America and the
recent approval from the U.S. Department of Energy (DOE) for the
export of LNG has created a strong opportunity and thereby a good
market for Chicago Bridge & Iron. The company is benefiting
from this potential in LNG market and has been receiving a steady
inflow of orders from the world's largest refineries and oil
& gas facilities. The company's order pipeline primarily
comprises front-end engineering and design (FEED) analysis of key
In addition, CBI is already an established niche player in the
LNG market, supported by its ability to participate in multiple
stages of development and strong base for investments. Given the
potential surge in the manufacturing and export of LNG worldwide,
CBI expects strong demand specifically for LNG/low temperature
storage systems (petrochemicals), an area where Chicago Bridge
& Iron plans to aggressively capture market share.
On May 6, 2013, CBI reported first quarter fiscal 2013
results, with earnings per share of 82 cents, down 20.4% from the
Zacks Consensus Estimate of $1.03. However, earnings were up
36.7% year over year driven by strong project activities and
robust backlog during the reported quarter.
Revenues for the quarter jumped 87.4% year over year to $2.3
billion, driven by the rising demand for energy
In the reported quarter, new awards totaled $1.95 billion (up
14.8% year over year), which increased the company's backlog to
$25.5 billion with a good mix of reimbursable and lump sum
On the heels of the strong first quarter results, earnings
estimates trended higher in the past 60 days. The Zacks Consensus
Estimate for fiscal 2014 climbed 0.4% to $5.17 per share. This
represents year-over-year growth of 23.7%.
Other Stocks to Consider
Apart from Chicago Bridge & Iron, other stocks in the
energy and construction sector that are currently performing well
Emcor Group Inc
), both having a Zacks Rank #1 (Strong Buy).
) is another stock worth considering and it carries a Zacks Rank
CHICAGO BRIDGE (CBI): Free Stock Analysis
DYCOM INDS (DY): Free Stock Analysis Report
EMCOR GROUP INC (EME): Free Stock Analysis
PERNIX GROUP (PRXG): Get Free Report
To read this article on Zacks.com click here.