McDermott International, Inc. (MDR): Analysts Giving Thumbs Up or Thumbs Down?

Here’s how investors should make decisions about buying, holding or selling McDermott International, Inc. (NYSE:MDR) stock. On Tuesday, shares of McDermott International, Inc. (NYSE:MDR) closed higher after an active session. The shares accumulated 0.16 points or 1.75 percent at $9.3 with a heavy trade volume of 4.976 million shares. After opening the session at $9.29, the shares went as high as $9.67 and as low as $9.21, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $1.69 billion and now has 181.19 million shares outstanding. McDermott International, Inc. (MDR) stock has gained 9.03 percent of market value in 21 trading days.

MDR stock has a trailing 3-year beta of 2.78, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $1.87 a share in the trailing twelve months. The stock’s value has surged 42.2 percent year to date (YTD) against a decline of -58.22 percent in 12 month’s time. The company’s shares still trade -61.54 percent away from its 1-year high of $24.18 and 52.46 percent up from 52-week low of $6.10. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

McDermott International, Inc. (MDR) will probably climb 64.3 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $16 price as 12-month high target. This represents a whopping 72.04 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $10, which represents a return potential of 7.53 percent when compared to the closing price of the stock of $9.3 on Tuesday, February 12. The lowest price target for the stock is $8 — slightly more than -13.98 percent from MDR’s current share price.

History has shown that shares in McDermott International, Inc. have gone up on 20 different earnings reaction days and are predicted to add 0.09 percent when the company reports upcoming earnings. Investors will get their next glimpse of MDR’s Q4 earnings on February 25. Analysts are forecasting revenue to climb 267.7 percent to $2.64B in the fiscal fourth quarter, while earnings are seen soaring by nearly -26.67 percent to $0.22 per share. It earned $0.2 per share, worse than the $0.29, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.29B, worse than the $2.5B analysts expected. Earnings are estimated to increase by 671.5 percent this year, 64.37 percent next year and continue to increase by 59.73 percent annually for the next 5 years.

Let’s take a look at some insider activity at McDermott International, Inc. (NYSE:MDR) and see the pattern. The earliest insider trade took place on 01/16/2019. Munro Scott parted with a total of 2.25 thousand shares of company at average share price of $8.74. The total for the sales was set at $19.67 thousand. After this transaction, the SVP, Chief Corp. Dev. Officer account balance stood at 30.77 thousand shares. The stock grew 4.58 percent since that insider sale. On 11/23/2018, Kawash Tareq, SVP, Eur., Afr., Russ. & Casp., purchased 26 thousand shares at a price per share of $7.9. This added 205.4 thousand shares to the insider’s fortune and the stock saw a 15.7 percent rally in value since the news became public. This transaction left 28.48 thousand shares in the SVP, Eur., Afr., Russ. & Casp. account.

On 11/13/2018, SVP, Middle East & North Afr. Austin Linh performed a purchase transaction worth $80.3 thousand. This purchase at $8.03 each has added 10 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded 13.82 percent increase since the transaction was reported. The insider now is left with 54.64 thousand shares remaining in the account. Prescott Ian, who performs the SVP, Asia Pacific job, bought 18 thousand shares for $159.66 thousand. The acquisition occurred on 11/09/2018 was priced at $8.87 per share. The share price soared 3.04 percent since the reporting date. Prescott Ian now left with a stake of 30 thousand MDR stock worth $279 thousand after the insider buying.

The stock is currently hovering around the first support level of $9.12. Below this, the next support is placed in the zone of $8.93. Till the time, the MDR stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 58.08 on daily chart, which may remain a cause for concern. If the price breaks below $8.93 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $9.58 mark may result into a pull-back move towards $9.85 level.

Shares of McDermott International, Inc. (MDR) are trading at a P/E ratio of 4.89 times earnings reported for the past 12 months. The industry MDR operates in has an average P/E of 15.47. Its P/E ratio went as low as 7.1X and as high as 61.56 over the 5-year span.Further, it is sporting a 0.31 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.51. 14.3 percent is the gross profit margin for McDermott International, Inc. and operating margin sits at 5.6 percent. Along with this, the net profit margin is 2.1 percent.