Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Company Name: KEPPEL CORPORATION LIMITED
| Research House: DMG | Price Call: BUY | Target Price: 11.03 |
Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
| Research House: DMG | Price Call: BUY | Target Price: 5.46 |
DMG & Partners has cut its target price for Singapore oil rig builders Keppel Corp (KPLM.SI) and Sembcorp Marine (SCMN.SI) but kept its buy rating for both companies. DMG’s new target for Keppel Corp is $11.03, down from $13.35, while it now says SembMarine is worth $5.46, versus $6.25 previously.
DMG has lowered its 2012 earnings per share estimates for Keppel and SembMarine by 3-5% to account for lower order wins as it expects rig owners to slow down their spending on new rigs.
“While share prices could see near term weakness on rising concerns over new orders and potential cancellations, we think the offshore and marine sector is more resilient today given stronger customer profile for existing orders, continued pickup in rig day rates,” said DMG in a report.
The brokerage said it prefers Keppel over SembMarine in times of uncertainty given the former’s stronger earnings visibility in 2012.
At 9:58 a.m., shares of Keppel were 0.12% lower at $8.63, having fallen 16% since the start of the year.
SembMarine shares fell 0.52% to $3.83 and are down about 29% since the start of the year.
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