When The Street Says Chicago Bridge & Iron Is A 'Bargain,' Pay Attention

Chicago Bridge & Iron Company N.V. (NYSE: CBI) released its Q4 earnings on Tuesday and beat analyst EPS estimates.

Two Wall Street analysts both took bullish positions on the stock Wednesday and expected upside growth.

Jefferies analyst Luke Folta reiterated a Buy rating but lowered the price target from $95 to $75. Despite the price target cut, Folta continued to see the stock as a “bargain.”

Folta mentioned that the company lowered its 2015 EPS and revenue guidance “modestly” amid weakness in oil and gas, however, CBI expected its awards and backlog to grow during 2015.

CBI also planned a repurchase of at least 10 percent of outstanding shares in 2015 to 2016 and suggested that a restructuring or divestiture of assets could generate more than $100 million in cash “that would be used towards additional share buybacks,” according to Folta.

D.A. Davidson analyst John B. Rogers was also bullish and maintained a Buy rating with a $70 price target on the stock.

Rogers highlighted the company’s "substantial cash flow" in the quarter of approximately $613 million or $5.50 per share. According to Rogers, “Cash flow has been a concern for investors due to recent declines and collections on ongoing nuclear projects, which have experienced substantial cost overruns.”

The analyst was “optimistic” about CBI due to the backlog of projects, including “LNG export facilities, new gas fired power plants, and other energy/downstream infrastructure that could be awarded in 2015.”

Rogers also noted that the shares traded at a discount to E&C peers and concluded that “with sustained earnings and cash flow, let alone growth, we expect the stock to appreciate substantially from current levels.”

Chicago Bridge & Iron Company closed Wednesday at $47.65, up 14.21 percent.