Is There Enough Gas In The Tank To Take CB&I Back Up?
Stephen Simpson, CFA • 15 Comments
Stephen Simpson, CFA • 15 Comments
Chicago Bridge: The 2 Sweetest Words
Bumbershoot Holdings • 41 Comments
Bumbershoot Holdings • 41 Comments
Yesterday, 8:25 AM
- General Electric (NYSE:GE) was yesterday's biggest laggard among Dow stocks, sinking 1.6% after reporting a 2% drop in orders for Q2, with industrial orders - GE’s jet engines, power turbines, oil production equipment, et. al. - plunging 16% amid weakness in oil and gas prices that hurt demand.
- "The texture of this quarter is very similar to the two most recent quarters, with exceptionally weak orders,” says Morgan Stanley's Nigel Coe, who rates GE at Equal Weight with a $32 price target.
- GE's total Q2 revenues rose 15% Y/Y to $33.5B, but organic industrial sales excluding the Alstom acquisition fell 1%; GE needs to meet its own expectations for a substantial upturn in organic trends in H2 in an "extremely challenging" environment, Coe says.
- "Those are capital intensive purchases and if those get pushed out even just a little bit" it could weaken GE's performance, says Edward Jones analyst Jeff Windau.
- Andrew Elofson at Davidson Investment Advisors takes the long view, seeing Q2 as "a speed bump on the path to their transformation” and not really looking at whether GE can hit its 5% organic sales growth target for H2.
- But Standpoint Research’s Ronnie Moas responded to the Q2 results by slapping a Sell rating on GE with a $26 price target, seeing no reason to own the shares that trade at more than 20x 2016 EPS estimates while "dozens" of mid-cap names with room to grow trade at or below 10x earnings - such as YRCW, TGI, AVH, GBX, ARII, CBI, UAL, SPR and ACM.
Fri, Jul. 22, 3:56 PM
- CB&I (CBI -7.1%) is downgraded to Neutral from Outperform with a $40 price target, cut from $45, at Robert W. Baird, as newly filed litigation between CBI and Westinghouse, the company's former EPC consortium partner for U.S. nuclear projects, highlights a ~$2.4B difference in opinion on working capital adjustments associated with last year's nuclear transaction.
- Baird believes the merits of Westinghouse's claims appear without merit but the nuclear overhang for investor has now returned, derailing what was supposed to be a cleaner story.
- The firm says that the news, when combined with fewer fundamental catalysts, caps upside potential and moves it to the sidelines.
Mon, May 16, 9:50 AM
- Johnson Rice raises Chicago Bridge (CBI +3.8%) to Buy from Accumulate, and raised its price target on the stock to $60 from $50.
- The firm believes the valuation gap between CB&I and those of its peers should narrow as investors gain confidence in the company's cash generation and declining debt levels.
Wed, May 4, 5:46 PM
Wed, Apr. 20, 5:37 PM
Wed, Apr. 20, 4:23 PM
Tue, Apr. 19, 5:35 PM| Tue, Apr. 19, 5:35 PM | 16 Comments
Tue, Mar. 29, 10:50 AM
- Ecopetrol (EC -5.1%) has started legal proceedings in a Colombian court against contractor Chicago Bridge & Iron (CBI -0.8%) for $2B over claims related to its Reficar refinery in Colombia.
- EC has said bad management at CBI increased spending on the project by $4B, double the original $3.99B price tag.
- The Reficar refinery, part of EC's operations near the northern coast of Colombia, reopened late last year after an overhaul meant to more than double capacity to 165K bbl/day.
Thu, Mar. 3, 12:59 PM
- Chicago Bridge & Iron (CBI +2.4%) is named as J.P. Morgan's Top Pick in the engineering and construction sector, with the firm maintaining its Overweight rating and $52 price target while pointing out attractive valuation as well as the robust upside potential.
- JPM believes CBI offers strong risk-reward potential for patient value investors, citing shares trading at 7x near-term EPS, removal of the nuclear overhang, and strong momentum in new business across industries and geographies.
- CBI is among the few fully integrated companies in the E&C sector that could independently execute on large and complex projects, the firm says.
- JPM also points out that 75% of the company's 2016 revenue already is in backlog.
Tue, Mar. 1, 9:02 AM
Thu, Feb. 25, 4:20 PM
Wed, Feb. 24, 5:35 PM
- ACTG, ADSK, AEGR, AGO, AHT, AIRM, AL, ALEX, AMH, ATLS, AXLL, BGS, BIDU, BIO, BLOX, BMRN, BVN, CBI, CBPO, CLVS, COWN, CSU, CVT, DGI, DK, DKL, DLR, EBS, ENV, EOG, EVC, GERN, GG, GPS, GSAT, HASI, HEI, HK, HLF, HTGC, HWAY, IART, IM, IMMR, INTU, KBR, KHC, KND, KW, KWR, LYV, MACK, MAIN, MDVN, MELI, MHK, MITT, MNST, MTZ, NDLS, NNI, NTRI, OLED, OUT, OVAS, PANW, PBA, PEGA, PFMT, PODD, PRAA, RARE, RBA, RLOC, RPTP, RRC, RRMS, RTRX, SBAC, SEM, SEMG, SPLK, SPNC, SSRI, STAG, STMP, STRZA, SWN, TSRO, TWOU, TXMD, UHS, WIFI, WPG, WTW, XNPT, ZOES
Wed, Feb. 17, 4:29 PM
Wed, Feb. 10, 12:38 PM
- Colombia's government is preparing a complaint against contractor CB&I (CBI -3.2%), which directed construction on the newly renovated Reficar refinery, after accusations that poor management sent the project ~$4B over budget, Reuters reports.
- The refinery, part of state-run Ecopetrol (EC +1.8%), reopened late last year after a multi-billion-dollar overhaul meant to increase its capacity to 165K bbl/day from 80K bbl/day to 165,000.
- Colombia's comptroller estimates final costs came in at $8B vs. the original $4B projection, although EC says the total is still being calculated.
Tue, Feb. 9, 2:24 PM
- CB&I (CBI -0.7%) says it expects Q4 earnings to beat expectations and will increasingly focus on petrochemical and liquefied natural gas projects along the Texas and Louisiana coasts while riding out the oil bust.
- CBI sees Q4 EPS of $1.56 vs. $1.48 analyst consensus estimate on revenues of $3.3B vs. $3.46B consensus, while expecting to report $3.3B in new awards for the quarter; for FY 2016: CBI sees EPS of $5.00-$5.50 vs. $5.19 consensus on revenues of $11.4B-$12.2B vs $12.7B consensus, with anticipated new awards of $13B and a $23B backlog.
- When asked whether CBI is taking on marginal terms to get more contracts and maintain market share during the downturn, CEO Phil Asherman says the company can deliver accurately on fixed-term contracts with its efficiencies and lower reliance on subcontractors.
Mon, Jan. 4, 4:58 PM
- Southern Co. (NYSE:SO) subsidiary Georgia Power says it completed the settlement process between the co-owners of the Vogtle nuclear expansion and the project's contractors, Westinghouse and CB&I (NYSE:CBI), and says its ~$350M portion of the settlement cost is significantly less than the claims that were in litigation.
- Georgia Power says the agreement settles all claims in litigation, reaffirms current in-service dates, adds additional contractual protections and positions Westinghouse and its affiliates as the primary contractor over the project.
- In tandem with the completion of the settlement, SO also says Westinghouse has contracted with Fluor (NYSE:FLR) to manage the construction workforce at the Vogtle expansion site.
Chicago Bridge & Iron Co. NV engages in the provision of conceptual design, technology, engineering, procurement, fabrication, construction, and commissioning services to the energy, petrochemical, and natural resource industries. It operates through the following segments: Engineering,... More
Sector: Industrial Goods
Industry: General Contractors
Country: United States
Other News & PR