NOL - NOL upgrade to Outperform by Credit Suisse; target $2.43

Stock Name: NOL
Company Name: NEPTUNE ORIENT LINES LIMITED
Research House: Credit Suisse

Credit Suisse upgrades Neptune Orient Lines (N03.SG) to Outperform from Neutral, raises target to $2.43 from $2.35; expects strong 3Q10 earnings of over US$260 million ($337 million) vs US$100 million in 2Q10, thanks to successful Transpacific rate hike in late 2Q; says 3Q consensus expectations appear low (average around US$200 million), says Dow Jones.

“NOL’s 3Q freight rate is 12% higher than that of 2Q, and the YTD run rate is above our expectation. As a result, we raise FY10-12E blended freight rates by 1% and earnings by 7%-17% to US$407 million, US$528 million and US$611 million,” says Credit Suisse.



Adds P/B should trade closer to previous peak-cycle multiple, based on projected FY10-11E ROAE of 14%-16%, which higher than last 10-year average of 11%. Shares +1.4% at $2.10.