MRC Global Inc. MRC has failed to impress investors with its recent operational performance due to weakness in the Gas Utilities and Production & Transmission Infrastructure (PTI) sectors. Also, foreign currency headwind is an added uncertainty.

Houston, TX-based MRC Global is one of the leading distributors of pipes, valves and fittings, and related products and services. The company’s products are used across upstream, midstream and downstream sectors of the oil and gas industry. MRC currently carries a Zacks Rank #5 (Strong Sell). The company belongs to the Zacks Steel - Pipe and Tube industry.

Factors Affecting MRC

Business Weakness: Continued customer destocking is affecting the Gas Utilities sector. Also, higher interest rates and inflation in construction costs are causing customers to delay project activity. Revenues from the Gas Utilities sector declined 6% year over year in the third quarter. Decreases in rig counts in the U.S. oil field due to the widespread consolidation of producers, particularly in the Permian Basin and low natural gas prices, are affecting the PTI sector.

Rising Debt Level: High debt levels raise financial obligations and may hurt MRC Global’s profitability. The company exited third-quarter 2024 with a long-term debt of $85 million, higher than $9 million reported at the end of the fourth quarter of 2023.

Forex Woes: MRC’s wide exposure to global markets makes it more vulnerable to forex woes. This is because a strengthening U.S. dollar may require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry for the company.

MRC Global Inc. Price and Consensus

MRC Global Inc. price-consensus-chart | MRC Global Inc. Quote

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