STOCKS NEWS SINGAPORE-Citi lowers STX OSV target price

Fri Nov 23, 2012 4:25am GMT

Related Topics

Citigroup cut its target price on STX OSV Holdings Ltd to S$1.70 from S$1.95 and kept its 'buy' rating, citing lower margin and muted growth expectations over the next two years.

By 0412 GMT, STX OSV shares were down 1.1 percent at S$1.36, and have gained 17 percent since the start of the year, compared with the FTSE ST Oil & Gas Index's 18 percent rise.

Concerns over the pace of STX OSV's order wins and margin pressure are likely to weigh on its shares in the near term, Citi said.

However, the brokerage sees an attractive opportunity to buy STX OSV shares due to the recent fall in share price after its third-quarter earnings.

"We believe investors may have taken an overly bearish view and that risks have most likely been mispriced," said Citi, adding that the decline in third-quarter sales was due mainly to lumpy revenue recognition.

1215 (0415 GMT)

(Reporting by Charmian Kok in Singapore; Editing by Subhranshu Sahu; charmian.kok@thomsonreuters.com)

************************************************************

10:21 STOCKS NEWS SINGAPORE-UOB cuts Keppel target price

UOB Kay Hian cut its target price on Keppel Corp Ltd , the world's largest rigbuilder, to S$12.30 from S$12.80, but kept its 'buy' rating, citing lower operating margin assumptions.

By 0208 GMT, Keppel shares were up 0.1 percent at S$10.56, and have risen 13.5 percent since the start of the year, compared with the Straits Times Index's 12.9 percent rise.

UOB lowered its offshore and marine margin estimates for Keppel in 2013 and 2014, which resulted in a 4 percent lower net profit forecast for next year. However, higher infrastructure earnings will help to support earnings in 2014.

Higher operating margins seen from 2010 to mid 2012 were mainly due to lucrative contracts secured during the boom years of 2007-2008, UOB said.

"We believe Keppel stands a good chance of registering higher offshore and marine margins than Sembcorp Marine as it is building semi-submersible rigs for Brazil," which are not new to the company, the brokerage said.

1009 (0209 GMT)

FILED UNDER: