Stifel Still Bullish on MRC Global After Cutting Price Target

Stifel analysts have revised their outlook on MRC Global Inc. (NYSE: MRC), lowering the 12-month price target from $16 to $14, while maintaining a Buy rating on the stock. Despite the cut, the brokerage remains optimistic about the company’s financial health and long-term growth potential.

MRC Global is currently trading around $10.24, which analysts at InvestingPro still see as undervalued, with price targets ranging between $13 and $17. The updated view follows the release of the company’s preliminary Q1 2025 results, which outperformed expectations on revenue, EBITDA, and cash flow.

Q1 2025: MRC Beats Street and Stifel

MRC Global’s preliminary Q1 2025 numbers were a bright spot:

• Revenue: ~$710 million 
  • Above Stifel’s forecast of $680M 
  • Above Street consensus of $679.8M 
• Adjusted EBITDA: ~$35 million 
  • Surpassed Stifel’s estimate of $26.5M 
  • Beat Street’s expectation of $30.3M 
• Operating Cash Flow: ~$20 million 
  • Significantly better than Stifel’s -₹46.7M forecast 
  • Outpaced consensus estimate of $5.8M 

This strong beat reflects solid execution, especially as the company battles global economic uncertainty and the effects of inflation and tariffs.

🔗 What is EBITDA? – Investopedia
🔗 Understanding Free Cash Flow – Forbes

Strong Liquidity and Profitability Metrics

MRC Global continues to show impressive financial stability:

• Current Ratio: 1.81 
• Free Cash Flow Yield: 28% 
• Gross Profit Margin: 20.59% 
• Return on Invested Capital (ROIC): 9% 

According to InvestingPro, MRC scores “GOOD” in overall financial health, particularly excelling in relative valuation and profitability metrics.

🔗 Current Ratio Explained – Wikipedia
🔗 What Is ROIC – Corporate Finance Institute

Looking Ahead: Policy and Market Challenges

Despite the Q1 beat, Stifel remains cautious about macroeconomic headwinds, especially in the upstream energy segments. The firm pointed to:

• Possible impact from slower oil demand 
• U.S. trade policy adjustments 
• Inflation trends and geopolitical uncertainty 

However, analysts believe a rebound in Gas Utilities, coupled with supportive policy measures, could offset these risks and cushion margins through the year.

Strategic Initiatives & Portfolio Optimization

In recent months, MRC Global has taken multiple steps to streamline operations and boost shareholder value:

• Announced a joint venture with Frisbie Measurement Services to form IMTEC Services, focused on smart gas meter services 
• Divested Canadian operations to Emco Corporation 
• Launched a $125 million share repurchase program 

Analysts at Loop Capital and Stifel continue to back the stock with Buy ratings, citing:

• Improved daily order flow 
• Healthier backlog levels 
• A clear roadmap for Q2 2025 growth 

🔗 MRC Global Investor Relations
🔗 M&A and Portfolio Strategy – Harvard Business Review

Recent Financial Performance Recap

• Q4 2024: 
  • Missed EPS at -$0.14/share (vs. +$0.10 expected) 
  • Revenue at $664M, down 10% YoY 
• Full-Year 2024: 
  • Sales of $3.01 billion 
  • Net income of $78 million 
  • Guidance to generate $100M+ in 2025 operating cash flow 

Despite the mixed fourth quarter, the company’s strong Q1 rebound and strategic realignments have restored analyst confidence in its mid-term prospects.

Final Thoughts

While Stifel’s lower price target to $14 reflects short-term macro caution, its continued Buy rating underlines belief in MRC Global’s turnaround and resilience. With improved liquidity, upbeat Q1 results, and strategic divestitures, MRC may be positioning itself for a stronger H2 2025.

Investors tracking industrial stocks, energy equipment firms, or dividend/value plays should keep MRC Global on their radar.

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