Stock Name: Noble Grp
Company Name: NOBLE GROUP LIMITED
Noble Group, Hold S$1.18, Bloomberg: NOBL SP
Limited valuation support
Price Target : 12-Month S$ 1.30 (Prev S$ 1.45)
· Expect core 1Q12 earnings of between US$100-120m on better crush margins
· Trim FY12-14F earnings by 1-5% as we impute new commodity prices and trim
pace of margin uplift
· FY12 earnings recovery driven by volume and margin improvement in
soybean, sugar and coal
· HOLD rating maintained on revised TP of S$1.30
1Q12 core profit of US$100-120m, is due to be reported by Noble on 10 May,
2012. A sequential rise from US$72.2m core profit in 4Q11 should be driven
by (1) a rise in South American crush margins (as indicated by recent ADM
and Bunge results), (2) strong coal volume growth due to the ramping up of
Noble's Australian mines and expansion of Berau contract volumes and (3)
margins recovery in Metals, Minerals and Ores (MMO), on the back of higher
aluminum and iron ore prices. Potential weakness could come from the US gas
and power business, due to record warm weather in the March 2012 quarter,
and a collapse in US gas prices.
FY12-14F core profit cut by 1-5%, as we impute our latest commodity price
forecasts and moderate margin outlook. Post these earnings changes and
inclusion of weaker SGD/USD rate we reduce our TP to S$1.30 from S$1.45.
FY12 earnings recovery post tough 2011 is mainly on account of greater
contribution from Agriculture via higher South American soybean crush
margins and rebound in sugar volumes following weak 2011 Brazilian harvest.
Growth would also come from Energy segment which will benefit from
expansion of Gloucester Coal's mines, greater third party coal volumes,
increased oil storage facilities and growth in the US energy
trading/distribution platform.
Hold call is maintained, as we believe the earnings recovery is now priced
in. In addition, as Noble is only trading close to its average forward PE
and PB multiples and not at depressed levels yet, we see a lack of
incentives for investors to purchase the counter in the near term.
Company Name: NOBLE GROUP LIMITED
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 1.30 |
Noble Group, Hold S$1.18, Bloomberg: NOBL SP
Limited valuation support
Price Target : 12-Month S$ 1.30 (Prev S$ 1.45)
· Expect core 1Q12 earnings of between US$100-120m on better crush margins
· Trim FY12-14F earnings by 1-5% as we impute new commodity prices and trim
pace of margin uplift
· FY12 earnings recovery driven by volume and margin improvement in
soybean, sugar and coal
· HOLD rating maintained on revised TP of S$1.30
1Q12 core profit of US$100-120m, is due to be reported by Noble on 10 May,
2012. A sequential rise from US$72.2m core profit in 4Q11 should be driven
by (1) a rise in South American crush margins (as indicated by recent ADM
and Bunge results), (2) strong coal volume growth due to the ramping up of
Noble's Australian mines and expansion of Berau contract volumes and (3)
margins recovery in Metals, Minerals and Ores (MMO), on the back of higher
aluminum and iron ore prices. Potential weakness could come from the US gas
and power business, due to record warm weather in the March 2012 quarter,
and a collapse in US gas prices.
FY12-14F core profit cut by 1-5%, as we impute our latest commodity price
forecasts and moderate margin outlook. Post these earnings changes and
inclusion of weaker SGD/USD rate we reduce our TP to S$1.30 from S$1.45.
FY12 earnings recovery post tough 2011 is mainly on account of greater
contribution from Agriculture via higher South American soybean crush
margins and rebound in sugar volumes following weak 2011 Brazilian harvest.
Growth would also come from Energy segment which will benefit from
expansion of Gloucester Coal's mines, greater third party coal volumes,
increased oil storage facilities and growth in the US energy
trading/distribution platform.
Hold call is maintained, as we believe the earnings recovery is now priced
in. In addition, as Noble is only trading close to its average forward PE
and PB multiples and not at depressed levels yet, we see a lack of
incentives for investors to purchase the counter in the near term.
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