Credit Suisse has raised its target price on Singapore’s Sembcorp Marine (SCMN.SI), the world’s second-largest oil rig builder, to $6.60 from $6.30 and maintained its outperform rating.
Sembcorp Marine said on Monday first quarter net profit rose 1.2% though revenue fell, while margins improved due to greater operational.
Credit Suisse said Sembcorp Marine’s margin performance has surprised on the upside over the past 24 months primarily due to increased efficiency and better pricing of orders. The brokerage lifted its 2011 margin forecast to 17% from 15%.
It also raised its order intake estimate for 2011 to $5 billion from $4 billion. Year to date, Sembcorp Marine has won $1.5 billion of orders and has another $2 billion of options in hand, Credit Suisse said.
The brokerage said it believes orders are likely to pick up in the second half of 2011 due to a combination of strong oil prices, the resumption of drilling in the Gulf of Mexico and positive commentary from offshore drillers.
No comments:
Post a Comment