DA Davidson on Friday raised its price target on Orion Marine Group (NYSE:ORN) to $15.00 from $13.00, retaining a Buy recommendation on the marine infrastructure services provider. The firm pointed to Orion's recently announced J.E. McAmis, Inc. and JEM Marine Leasing LLC acquisition as a driving factor behind the updated valuation.
The acquisition was described by DA Davidson as a "solid strategic fit," with the analyst emphasizing the transaction's "attractive financial merits," notably EBITDA margins in excess of 20%. The firm concluded that these attributes contribute to Orion's shift toward a more offensive growth narrative within the marine infrastructure services vertical.
Orion's shares were trading at $13.70 at the time of the note, a 6.4% increase from the prior close. The stock has shown notable momentum, rising more than 92% over the past six months.
Company activity in recent weeks has been extensive. Orion Group Holdings, Inc. completed the purchase of J.E. McAmis, Inc. and JEM Marine Leasing LLC for roughly $60 million. The deal's consideration was structured as a combination of cash, promissory notes and equity, and is intended to broaden Orion's marine operations.
In tandem with the acquisition, Orion announced it had been awarded an $86.3 million contract from the U.S. Army Corps of Engineers. The contract covers a shoreline protection project along the Texas coast, which includes building new breakwaters and replenishing shorelines to address erosion.
On the financing front, Orion put in place a new five-year, $120 million Senior Credit Facility with UMB Bank. That facility replaces a prior $88 million agreement and comprises a revolving credit line, an equipment term loan facility and an acquisition term loan facility.
Adding to the wave of analyst attention, JPMorgan initiated coverage of Orion Marine Group with an Overweight rating and set a $16.00 price target.
Taken together, the upgraded price target from DA Davidson, the strategic acquisition with reported high EBITDA margins, the sizable U.S. Army Corps contract, the expanded credit facility and the initiation of coverage by JPMorgan frame a period of active strategic and financial activity for Orion.
The firm-specific developments have coincided with a material increase in Orion's share price over the past six months, underscoring investor responsiveness to the company's recent transactions and contract awards.