DBS Vickers has raised Cosco (F83.SG) target price to $1 from 78 cents after increasing FY10-11 earnings estimates by 21–24% to assume higher margins for shipbuilding business, improvement in execution.

The broker says the worst over for shipbuilding with earnings poised to recover on lower steel, overhead, labour costs and increased operating efficiency.

Still, DBS Vickers is keeping its “fully valued” call on view that the stock is expensive at 20x FY10 earnings, saying, “We believe the market has overpriced the recovery expectation of the company.”

Shares off 2.3% at $1.25.

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