UPDATE: Stephens Upgrades Now Inc (DNOW) to Overweight

Stephens analyst Tommy Moll upgraded Now Inc (NYSE: DNOW) from Equal Weight to Overweight with a price target of $12.00.

The analyst comments "We are upgrading DNOW to OW from EW and reiterating our $12 price target, based on ~12x our ~$85 mil. mid-cycle adj. EBITDA estimate. While we had previously remained on the sidelines amid the recovery, we now have enhanced visibility to improved profitability as the Company has demonstrated a commitment to protect gross margins (third consecutive record margin in 3Q21) by focusing on higher margin manufacturers/suppliers/end markets + de-emphasizing lower margin opportunities, all while taking a disciplined approach to opex spending (WSA set to decline ~14% in 2021 on flattish revenue; going forward should increase at ~$0.03-$0.05 per $1 of revenue increase). Following 3Q21 where revenue improved 10% sequentially/ margins expanded ~200bps, DNOW looks to exit 2021 with a nearly $90 mil. yoy improvement in adj. EBITDA, and we see continued progress through 2022 as revenue is set to grow double-digits and incremental margins creep into the mid-to-high teens."

For an analyst ratings summary and ratings history on Now Inc click here. For more ratings news on Now Inc click here.

Shares of Now Inc closed at $8.35 yesterday.

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