Sembcorp Marine cut to "reduce", target cut to $2.82 by CIMB

Stock Name: Sembcorp Marine
Company Name: SEMBCORP MARINE LTD

Research House: CIMB

Price Call: SELL

Target Price: 2.82

SINGAPORE (March 30): CIMB has downgraded Sembcorp Marine to "reduce" from "add", saying the rig builder is facing the beginning of an "order drought".

It also cut its price target from $3.39 to $2.82, based on 11 times projected 2016 earnings, after lowering its 2015 to 2017 earnings per share estimates by 6% to 21% to factor in fewer orders.

CIMB analyst Lim Siew Khee now expects SembMarine to secure just $1.2 billion worth of new orders this year, down from an earlier forecast of $2 billion.