CLSA cuts SembCorp Marine (S51.SG) to Outperform vs Buy to reflect recent 20% rally; raises target to $5.25 vs $5.01, says Dow Jones.
CLSA says, possibility stock could trade well above fundamental value given strong momentum: “We remain happy holders but cautious buyers”.
Adds, “with further contracts likely before the year’s out, and a further S$2 billion-S$3 billion likely in 2011, not forgetting a potential $7 billion Petrobras order, the stock has ample share price catalysts.”
Says, 3Q indicates positive earnings growth in 2010; 18.1% 9M10 operating margin well above 14.2% forecast; adjusts margin forecasts for rest of year, 2011, 2012, resulting in earnings increasing by 12%-20%.
Continues to prefer SMM to Keppel Corp (BN4.SG) "for exposure to O&M space for its pure-play status." SembMarine shares +3.4% at $4.90.
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