UPDATE: Seaport Global Securities Downgrades FMC Technologies (FTI) to Neutral
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(Updated - September 22, 2016 9:22 AM EDT)
Seaport Global Securities downgraded FMC Technologies (NYSE: FTI) from Buy to Neutral with a price target of $28.00 (from $29.00). Analyst Mark Brown said subsea visibility continues to dim.
Brown explained, "We have reduced our rating to Neutral (from Accumulate) on valuation following our trimmed order and earnings forecast. We consider FTI one of the safest stocks to own through the cycle due to its $2.9B subsea backlog, low financial leverage (0.7x net debt to EBITDA at YE2016) and positive free cash flow (4% FCF yield in 2017). We also view the pending FTI-Technip favorably because it stands to drive down project costs below those of competitors. However, even with lowered project breakevens, upstream customers have little appetite for deepwater development spending. Consensus EBITDA expectations seem too aggressive against that backdrop."
Shares of FMC Technologies closed at $27.93 yesterday.
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