Company Name: EZRA HOLDINGS LIMITED
| Research House: Barclays | Price Call: BUY | Target Price: 1.70 |
Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
| Research House: Barclays | Price Call: BUY | Target Price: 13.30 |
Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
| Research House: Barclays | Price Call: BUY | Target Price: 7.00 |
Barclays said it prefers oil and gas services firm Ezra Holdings and Keppel Corp going into the next results season as it sees earnings growth and potential catalysts such as possible financing resolutions for Ezra and further contract wins for Keppel.
By 12:28 a.m., Ezra shares were 0.5% lower at $1.085, and have jumped 29% so far this year. Keppel, the world’s largest rig builder, was up 0.2% at $10.80 and has risen 16% since the start of 2012, compared with the FT ST Oil & Gas Index’s 21% gain.
Ezra is expected to deliver the highest year-on-year earnings growth in the April-June period out of the oil services and rig builders Barclays covers due to an increase in activity in its subsea business and utilisation of its offshore support segment, it said.
Barclays estimates Ezra’s earnings per share in the third quarter to jump 196% from a year ago, compared to Keppel’s 9% rise and Sembcorp Marine’s 4% gain.
"The key focus of the upcoming results will likely be on the operating margins...Ezra is expected to deliver sequentially better margins, the Singapore rig-builders are also expected to at least maintain their operating margins," said Barclays.
It has an 'overweight’ rating on Ezra with a target price of $1.70.
Barclays said the recent pullback in Keppel and Sembcorp Marine shares are an attractive entry point for investors. It rates Keppel at ’equal weight’ with a target price of $13.30, and Sembcorp Marine at 'overweight' with $7.00 target price.
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