Noble Grp - Noble upgraded to Neutral by CIMB, lifts target

Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Research House: CIMB

CIMB upgrades Noble Group (N21.SG) to Neutral from Underperform, lifts target price to $1.62 from $1.27 after increasing FY11-12 EPS estimates by 15%-17% to account for earnings contributions from Sempra Energy Solutions, which company is buying for US$582 million ($776 million) (including debt).



CIMB says price tag attractive, Sempra Energy’s net margins of 5.0% higher than Noble’s. Notes, investment also provides 14.5% earnings yield vs Noble’s long-term borrowing cost of 6.625%.



Research house says funding not an issue given Noble’s recent bond sales, cash from sale of its Middlemount coal mine in Australia. Shares +6.1% at $1.90.