Bullish Wall St. Industry Analyst Urges Investors: 'Occupy E&C

摘要

Market valuations of publicly owned construction-sector firms currently anticipate a 35% decline in future earnings, says Avram Fisher, analyst with BMO Capital Markets, New York City. However, Fisher disputes the valuation trend and the recent "extreme sell-off' of industry stocks and encourages investors to "occupy E&C." Fisher said on Oct. 10 that while the market predicts an earnings drop similar to the 2008-09 recession— when net profit declined 25%—he discounts as "inappropriate" prognoses that average company profit margins will fall to 6% or lower in the next two years. "While margin and booking pressure [are] anticipated, it is improbable they will be that extreme," says Fisher. He touts "companies exposed to global energy, as history suggests these stocks perform best coming out of the cycle." Fisher adds, "Given recent stability in backlog, this [scenario] would assume that earnings stabilize at current levels with growth for companies that are seeing bookings expand."