Zacks Investment Research downgraded
MRC Global Inc.
) to a Zacks Rank #5 (Strong sell) on Jul 2, 2013.
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Why the Downgrade?
Weak top-line results in the last quarter as well as below
expected sales outcome in the two months ended May 2013 resulted
in lower earnings estimates for MRC Global.
As per recent disclosures, management of MRC Global revised its
revenue guidance down from $5.75-$5.95 billion to $5.4-$5.8
billion for 2013 while it anticipates the second quarter 2013
revenue to range within $1.25-$1.35 billion.
Line pipe sales are expected to be $100 million below the
original forecast and roughly 10% down on a year-over-year basis
for the second quarter 2013. The same is expected to be down
roughly $300 million year over year for 2013. MRC Global's
OCTG sales are expected to be down $70 million for the second
quarter 2013 and $200 million for 2013 compared with their
respective year-ago periods.
A weak revenue outlook as well as lower earnings guidance raises
skepticism over the financial results in the quarters ahead.
Currently, for MRC Global, we have an Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of -5.0% for the second quarter 2013, -5.0% for 2013 and -0.4%
Also in the last 60 days, the Zacks Consensus Estimate for 2013
has gone down by 11.9% to $1.99 while for 2014, the estimate
decreased 8.9% to $2.47.
Other Stocks to Consider
MRC Global primarily engages in the distribution of pipes,
valves, and fittings (PVF), and related products and services to
the energy industry worldwide. The company currently has a $2.9
billion market capitalization.
Other stocks to watch out for in the industry are
Mueller Water Products, Inc.
Valmont Industries, Inc.
W.W. Grainger, Inc.