Company Name: SEMBCORP MARINE LTD
| Research House: UBS | Price Call: BUY | Target Price: 6.15 |
UBS Investment Research raised its target price on Sembcorp Marine , the world's second-largest rig builder, to $6.15 from $4.50 and maintained its buy rating.
Sembcorp Marine shares ended 0.8% lower at $5.14, having risen 34% so far this year.
UBS said positive data, such as day rates, enquiry levels and tendering activity, signal stronger-than-expected order wins in 2012.
“2012 looks likely to be a strong contracting year for Sembcorp Marine and accordingly we raise our estimate of new orders from $3.3 billion to $5 billion ,” analyst Cheryl Lee said in a report.
This excludes orders from Brazilian oil rig company Sete Brasil, which are likely to be imminent and should add a further US$4 billion ($5 billion) to the order book, UBS said.
While UBS does not see a return of margins before the 2008 global financial crisis, the extent to which new competitors can take market share away from Sembcorp Marine is limited by issues such as impact of late delivery and rig downtime.
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