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.