Stifel Trims Target Price on DNOW In (DNOW) to $16, Due to ERP Risk

DNOW Inc. (NYSE:DNOW) is one of the 14 Most Undervalued NYSE Stocks to Buy According to Analysts.

Sitel, on February 23, trimmed its target price on DNOW by 11.1% to $16 (from $18), while retaining its Buy recommendation on the stock. This target price cut comes a couple of days after the company released its Q4 2025 earnings on February 20, which showed the increased risk from lingering ERP implementation issues.

David Cherechinsky, DNOW’s President and Chief Executive Officer, addressed this issue during the analyst briefing. According to him, the challenges in MRC Global’s US ERP implementation (which were communicated in the 3rd quarter, pre-merger) were more persistent than initially anticipated. He described the issue as follows:

“Design architecture is resulting in inefficiencies for certain core processes, continuing negative operating and financial impacts. Observed limitations across the system are that it is slow, impedes customer service, requires more resources, increases safety stock, and difficulty in processing orders.”

The negative revenue, profit margin, and cash flow impact from the persistent issues (which affected ~40% of DNOW’s consolidated business) spilled over well into the 4th quarter. Despite the earnings miss, Sitel believes that the ERP issues will “ultimately be transitory in nature.”

DNOW Inc. (NYSE:DNOW) is a holding company engaged in the distribution of energy products for industrial clients in the United States, Canada, and internationally. The company is based in Houston, Texas, and was founded in November 2013.

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