Stocks may have taken a tumble for Foster Wheeler, but a bright future is predicted by analysts. The engineering and construction services firm with extensive oil and gas facility experience, saw a drop in its stock price of more than 62% in the past year, but analysts say the company has an advantage as the energy sector shifts to alternative energies.
"Foster Wheeler is at the center of the global build-out, the expansion of energy, electrical generation, and construction that is creating the world that will exist five to 10 years from now," said Bob Markman, manager of the Markman Core Growth and Markman Global Build-Out Funds.
Underinvestment in energy infrastructure like power plants and processing facilities has persisted for decades, so there is pent up demand for new projects in emerging markets and upgrades in developed economies.
"They have opportunities in growing markets like Indonesia, Russia, South Africa, Turkey, Vietnam and South America on the power side and in Saudi Arabia, Australia and Nigeria on the energy and chemicals side," says Steven Fisher, a UBS analyst. "Across their business they have a broad reach of opportunities in some good long-term growing markets."
"Long term, the compelling fundamental story is still intact," says Natixis Bleichroeder analyst Jeffrey Spittel.