Analysts Are Bullish on Top Materials Stocks: Tetra Technologies (TTI), Southwestern Energy (SWN)

By Jason Carr

There’s a lot to be optimistic about in the Materials sector as 3 analysts just weighed in on Tetra Technologies (TTIResearch Report), Southwestern Energy (SWNResearch Report) and MasTec (MTZResearch Report) with bullish sentiments.

Tetra Technologies (TTI)

In a report released yesterday, Tom Curran from B.Riley FBR reiterated a Buy rating on Tetra Technologies, with a price target of $7. The company’s shares opened today at $2.43.

Curran commented:

“TTI reported revenue and adjusted EBITDA of $282.5M and $46.6M, versus consensus of $264.6M and $43.5M and our $264.2M and $43.6M. All three divisions—Completion Fluids & Products, Water & Compression—beat their individual revenue estimates. Compared to consensus EBITDA estimates, Completion Fluids & Products ($13.0M vs. $11.9M) and Water & Flowback Services ($15.9M vs. $14.3M) delivered strong beats, while Compression ($29.2M vs. $29.4M) missed slightly. Despite the miss, 4Q18 Compression EBITDA still increased 18.7% over 3Q18’s $24.6M. We continue to like TTI’s exposure to these three end markets, which each feature different but exciting growth drivers. We maintain our Buy rating and $7 price target as we believe the stock offers compelling risk/reward at these levels.”

According to TipRanks.com, Curran is currently ranked with no stars on a 0-5 star ranking scale, with an average return of -9.6% and a 37.8% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Select Energy Services Inc, Forum Energy Tech, and USA Compression.

Tetra Technologies has an analyst consensus of Moderate Buy, with a price target consensus of $4.33.

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Southwestern Energy (SWN)

B.Riley FBR analyst Rehan Rashid reiterated a Buy rating on Southwestern Energy today and set a price target of $7.30. The company’s shares opened today at $4.37.

Rashid observed:

“For Southwestern Energy (SWN), we believe that the announced $150M or $0.26 per share of free cash flow generation during 4Q18 and repurchase of 39.2 million shares during 4Q18 through Feb. 28, 2019 or 6.75% of shares outstanding at an average price of $4.44/share should give investors material comfort with the intrinsic value of the enterprise. We also note that SEC PV 10 value at YE2018 was reported to be $6.5 billion or net of debt of around $8.15 per share. Furthermore, the company has previously announced 2019 guidance and is unchanged.”

According to TipRanks.com, Rashid is currently ranked with no stars on a 0-5 star ranking scale, with an average return of -7.2% and a 37.3% success rate. Rashid covers the Basic Materials sector, focusing on stocks such as Continental Resources, Gulfport Energy Corp, and Range Resources Corp.

Currently, the analyst consensus on Southwestern Energy is a Moderate Sell with an average price target of $4.95.

MasTec (MTZ)

In a report released today, Alex Rygiel from B.Riley FBR reiterated a Buy rating on MasTec, with a price target of $71. The company’s shares opened today at $46.40.

Rygiel observed:

“Last night (2/28) after the close, MasTec announced solid 4Q18 results which were modestly ahead of our estimates and management’s guidance, leading to record full year 2018 revenue, adj. EBITDA, and adj. EPS. The company also ended the year with record YE backlog of $7.7B. FCF generated during the year exceeded net income and allowed the company to pay down some debt and repurchase 7.2M shares through the year. We continue to believe that MTZ is well- positioned to benefit from positive trends across all of its segments, evidenced by its record backlog and solid 2019 guidance. We expect revenue growth and margin expansion to continue. Management will host a conference call to discuss results and 2019 guidance at 9:00am ET. We will have more details and an updated model following the call.”

Rygiel has an average return of 7.8% when recommending MasTec.

According to TipRanks.com, Rygiel is ranked #526 out of 5224 analysts.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for MasTec with a $59.40 average price target.

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