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Here’s Why MRC Global Stock Rose on Thursday
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Here’s Why MRC Global Stock Rose on Thursday

Story Highlights

MRC Global’s prospects look solid on the back of healthy demand in the sectors it serves. Further, the company’s revised projections for the second quarter and 2022 enhance its investment appeal.

MRC Global Inc. (NYSE: MRC) grabbed investors’ interest after it provided impressive preliminary results for the second quarter and increased its projections for 2022. Shares of this industrial products distributor grew 4.6% to $9.36 in the normal trading session and rose an additional 9% in Thursday’s extended trade.

In the second quarter, the company forecasts a 14% increase in sales versus the high single-digit growth stated earlier.

The adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin is forecast to be 7.5% in the second quarter. The adjusted EBITDA margin was 6.5% in the first quarter of 2022.

For 2022, MRC Global anticipates revenues of $3.3 billion, higher than its previous forecast of $3.1 billion. The revised projection reflects an increase of 24% from the year-ago tally. Also, the company expects sequential growth in the third quarter and a quarter-over-quarter decline in the fourth quarter.

The adjusted EBITDA in the year is expected to be $230 million, with a margin of 7%. Earlier, the company had projected an EBITDA of $200 million and an EBITDA margin of 6.5%.

MRC Global’s President and CEO, Rob Saltiel, said, “Robust activity in all of our sectors underpins our strong outlook for the full year, supported by continued growth in our order intake and backlog.”

MRC Global is slated to release its second-quarter 2022 results on August 8, 2022, after the market close. Analysts expect the company to post earnings of $0.22 per share and revenues of $800 million.

Solid Upside Potential

On July 7, 2022, Douglas Becker of Benchmark initiated coverage on MRC with a Buy rating and price target of $14 (49.57% upside potential).

Overall, the company has a Strong Buy consensus rating based on three Buys. MRC’s average price forecast of $14 reflects upside potential of 49.57% from the current level. Shares of MRC Global have grown 5.4% over the past year.

Crowd Wisdom

According to TipRanks, investor sentiment is Positive on MRC. The number of portfolios holding MRC stock has increased 2.8% in the last seven days.

Key Takeaways

The revised projections for the second quarter and 2022 are impressive and support MRC Global’s growth story. Solid prospects and upside potential of nearly 50% make MRC an attractive stock for an investor seeking exposure in the industrial space.

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