DNOW Has Limited Upside For Now
The drop in drilling and completions activity in the U.S. affected NOW Inc.’s (DNOW) results adversely in recent times. Its performance in the international markets, too, was suboptimal in Q1. To mitigate the effect, it discontinued some of its trade names and currently targets high margin product lines, which can lead to profitable market share gains. Strategically, it focuses on e-commerce sales and other digital marketing initiatives. The operating margin is also likely to improve from lower warehousing selling and administrative expenses and cost reduction initiatives.
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