Industrial Alliance analyst Elias Foscolos is staying cautious on McCoy Global (McCoy Global Stock Quote, Chart, News TSX:MCB) after the energy tech company\u2019s recent corporate update. In a report to clients Tuesday, Foscolos maintained his \u201cHold\u201d rating and dropped his target price from $0.80 to $0.60 per share, which at press time represented a projected 12-month return of 43 per cent. Edmonton-based McCoy Global manufactures and distributes specialized drilling and completion component products for the global energy industry. The company released its latest quarterly results in early March where it posted fourth quarter revenue of $11.9 million compared to $13.5 million a year earlier and adjusted EBITDA of $1.5 million compared to $0.8 million for Q4 2018. A volatile oil and gas market continues to impact demand for McCoy\u2019s products. McCoy gave a corporate update on Monday detailing the company\u2019s response to COVID-19 along with a market outlook. \u201cAs a result of the significant decline in oil and gas consumption globally and accompanying decline in oil and gas prices, exploration and production (E&P) capital spending plans continue to be cut materially, particularly in the North American land market, and we expect our customers will follow with significantly reduced capital equipment spending,\u201d said Jim Rakievich, president and CEO, in the press release. \u201cMcCoy has responded to the industry downturn with a plan of actions that are intended to protect our balance sheet in anticipation of revenue challenges,\u201d Rakievich said. Among McCoy\u2019s announced cost-cutting measures were employee headcount reductions, salary and wage cuts across all levels of the organization, a reduction in 2020 production and rental fleet spending by 80 per cent and a reduction in digital tech roadmap spending by 60 per cent. Together, the company plans to garner annualized savings of $6.5 million. In his review, Foscolos noted MCB\u2019s net debt which was at about $0.2 million by December 2019 and said that cash flow will likely be limited in 2020 and a working capital unwind will likely be required to break even and meet maturing obligations. \u201cMCB\u2019s cost-cutting initiatives and application for government aid are indicative of a challenging outlook. While the Company maintains a favourable cash and working capital position, we do not project positive funds flow before working capital adjustments, and are cautious in regards to upcoming debt principal repayments and covenants,\u201d Foscolos said. \u201cOur forecasts are positively influenced by an FX boost and likely decent performance in H1\/20 driven by strong 2019 year-end backlog and solid order intake earlier in the year,\u201d he said. The analyst has revised his estimates, now calling for fiscal 2020 revenue of $38 million (previously $51 million) and OIBDA of $1.5 million (previously $4.1 million). Foscolos\u2019 valuation methodology has shifted, as well, and now rests on an equal blend between his 4.0x EV\/OIBDA multiple and a 0.6x P\/B multiple. McCoy\u2019s share price has been dropping for a number of years and finished 2019 down 40 per cent. So far in 2020, the stock is down 30 per cent.