Share to sell – WorleyParsons

Back in May WorleyParsons suggested second half FY15 earnings would be flat on the first half.

At the March quarter update the company noted revenues were holding up but margins were under pressure.

A lack of recent awards and project sanctions leaves the FY16 earnings picture as opaque.

The company can generate cash in a downturn, and its strong balance sheet offers acquisition potential, but we do not believe the downgrade cycle is over yet in an uncertain oil & gas industry.

In terms of some of the recent M&A deals, question marks remain.

Recent acquisitions such as Evans & Peck, Rosenberg and TWP have not brought the necessary earnings to justify the price paid.

On the technical front, WOR appears to be breaking down once more after forming a range over the past six months.

Momentum is to the downside and the stock is not yet oversold.Share Tips graph


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