Maybank Kim Eng raised its target price for offshore services firm Ezion Holdings to $1.42 from $1.38 and kept its ‘buy” rating, on expectations of a stronger performance in the second half due to deployment of more rigs and contribution from a LNG project.
By 10:03 a.m., Ezion shares were up 2.5%, and have jumped 53% so far this year, compared to the FT ST Oil & Gas Index’s (6.3% gain.
Maybank expects Ezion’s earnings to grow by a compounded rate of 36% a year over the next three years, boosted by strong project pipelines.
Ezion also has the financial resources to fund its current projects, as it established a $500 million debt issuance programme earlier this year, Maybank said.
Although this would increase Ezion’s net gearing up to nearly 100% by the end of the year, Maybank expects the company to see positive free cashflow by 2014.
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