Freedom Broker initiated coverage of equipment supplier DNOW with a “Buy” rating

Freedom Broker analysts initiated coverage of DNOW Inc. (DNOW) with a “Buy” rating and a target price of $16 per share. At the current market price of $13.5, the stock’s upside potential is about 18.5%.

DNOW Inc. is an international supplier of equipment and engineered solutions for the energy and industrial sectors. The company specializes in the distribution of pipes, valves, compressors, and other equipment, and also provides supply chain management services and technical support for projects. DNOW’s customers include companies in oil and gas exploration and production, transportation and processing, municipal gas infrastructure, petrochemicals, and industrial manufacturing.

According to experts, the company has growth potential due to the successful integration with MRC Global (MRC), business expansion, and diversification of its customer base. MRC Global operates in the distribution of pipe fittings and related products for the energy industry. The transaction was completed at the end of 2025, valuing MRC Global Inc. at $1.5 billion. 

Freedom Broker notes that after the completion of the MRC Global deal, DNOW’s business structure has become more balanced. Whereas the company was previously largely focused on the oil and gas exploration and production segment, a significant share of revenue is now generated by more resilient areas—municipal gas utilities, hydrocarbon transportation, processing, and industry. Analysts believe this diversification will reduce the impact of commodity price fluctuations on the company’s financial results.

Among the key growth drivers, experts also highlight the expected increase in investment in the construction of gas pipelines and LNG facilities amid rising global demand for natural gas. At the same time, analysts point to risks related to the integration of MRC Global, a potential slowdown in activity in the oil and gas industry, and an acceleration of the energy transition, which could limit long-term investment in traditional energy infrastructure.

This is not an individual investment recommendation.