Q: A nice run recently came to an end with weaker quarterly earnings. Buy, hold, or sell at current levels?
5i Research Answer:
MTL bounced a bit and remains up 8% YTD. EPS of 15c did miss estimates of 21c; revenue of $533M was 0.5% better than expected. Acquisitions boosted revenue growth, but the lack of capital spending in the sector continues to be a drag on results. There was some cost creep, and margins were impacted. Not a disaster here, and EPS can rebound sharply with the sector. At 14x earnings and with a dividend nearing 5%, we see it as a HOLD today.