Analyst John B. Rogers of D.A. Davidson rated Chicago Bridge & Iron a Buy today:

a. buoyant market prospects and the company’s discounted valuation outweigh the risks. The stock’s sharp price decline has created a buying opportunity.

b. Shares have fallen by over 15% in response to the recent announcement of substantial project losses and estimate reductions, and are down 50% year-to-date. The shares now are trading substantially below peers’ and historical averages.

c. Chicago Bridge & Iron has market opportunity which is exceptiona; higher oil and gas prices have spurred interest in related infrastructure, including specialty components/structures for which Chicago Bridge & Iron is a market leader. The company expanded backlog by over 60% in 2007 and appears poised to grow revenue by 40% in 2008.  Much of this growth to the previous run-up in oil prices to levels near $100 per barrel.

d. Historically, project losses have been followed by periods of improved profitability, Thus, he is expecting the stock to appreciate.

e. 12-18 month target price is $40. Five-year target price is $75.

Track John Roger’s pick at:

http://www.trackthepros.com/categories.php?category_id=1231