Sembcorp Marine cut to "underperform", target cut to $2.68 by Daiwa

Stock Name: Sembcorp Marine
Company Name: SEMBCORP MARINE LTD

Research House: Daiwa

Price Call: SELL

Target Price: 2.68

SINGAPORE (Feb 3): Daiwa has downgraded Sembcorp Marine to "underperform" from "hold" and cut its price target from $3.81 to $2.68, which is based on 10.8 times projected 2015 earnings.

The changes incorporate a 2% to 14% cut in its earnings estimates for 2014 to 2016 to factor in fewer new orders.

"A prolonged low oil-price environment, coupled with a saturated drilling industry, could well be the perfect storm that heralds a new era of depressed MODU (mobile offshore drilling unit) orders over the next two to three years," Daiwa analyst Royston Tan wrote in a note.