UPDATE: Piper Sandler Downgrades Helix Energy Solutions Group, Inc. (HLX) to Neutral
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Piper Sandler analyst Ian Macpherson downgraded Helix Energy Solutions Group, Inc. (NYSE: HLX) from Overweight to Neutral with a price target of $4.50 (from $5.30).
The analyst comments "This is less a call to action downgrade than a realignment of risk/reward for HLX relative to our broader SMID OFS universe, and reflects materially lower ’22 revisions as the recovery thesis appears to be drifting to the right. Even on lower estimates, HLX remains distinguished by sector leading FCF yield (11% midpoint) and balance sheet (net debt approaching zero), which keeps it well positioned as a later cycle recovery story. Later cycle, however, is smelling more like ’23 than ’22 with 100% of the fleet rolling into still choppy spot market conditions exiting this year. We’re spitballing ’22 as +/- flat y/y at this point, but the range of possibilities is plenty wide. Resolving uncertainties for the two Brazil vessels (Aug ’21 and Dec ’21 contract conclusions) stands out as the biggest near term hurdle, as one or both of these may need to be absorbed in new markets."
Shares of Helix Energy Solutions Group, Inc. closed at $4.15 yesterday.
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