McDermott International: On A Good Trajectory, Shares Remain Deeply Discounted
McDermott International is making solid progress in its turnaround, reporting a 38% increase in EBITDA from 2024, strong cash flow, and improving backlog despite global project delays. The company expects adjusted EBITDA to reach $520 million in 2026 with a 6.5% margin as legacy fixed-price risks diminish. It is currently working to refinance its 2027 debt to secure long-term stability. Shares remain undervalued relative to the company's improving fundamentals.
- ▪McDermott International reported a 38% year-over-year increase in EBITDA for 2025.
- ▪The company generated strong cash flow and improved its project backlog despite global disruptions.
- ▪McDermott expects adjusted EBITDA of $520 million in 2026, reflecting a 21% increase and a 6.5% margin.
- ▪Legacy fixed-price projects are declining, reducing risk exposure.
- ▪McDermott is seeking to refinance its long-term debt due in 2027 to support its ongoing turnaround.
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