STX OSV falls on broker downgrade

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: Credit Suisse

Price Call: HOLD

Target Price: 1.60

Shares of Singapore-listed offshore vessel builder STX OSV (STXO.SI) fell as much as 7.5% on Friday after Credit Suisse downgraded the stock to neutral as it expects the firm to book fewer orders in coming years.

At 3:05 p.m., shares of STX OSV were traded at $1.235 with over 24.3 million shares changing hands. This was three times the average daily volume over the last five sessions.

Credit Suisse lowered STX OSV to neutral from outperform and cut its target price to $1.60 from $2.00.

“We believe that earnings are increasingly at risk with a slowdown in orders,” said Credit Suisse in a report.

It added that STX OSV has only secured 4.1 billion Norwegian crowns worth of contracts in 2011, representing only 32% of the brokerage's previous forecasts.

Therefore, it has cut its orders forecasts for STX OSV to 11 billion Norwegian crowns for this year and 10 billion Norwegian crowns in 2012.