Credit Suisse has raised its target price on Singapore’s Keppel Corp (KPLM.SI), the world’s largest oil rig builder, to $14.60 from $14.18 and maintained its outperform rating.
Keppel has secured $7.1 billion of orders year-to-date and has options for additional rigs worth $2.5 billion, Credit Suisse said, adding that it has raised its 2011 order forecast to S$10 billion from $8 billion.
Credit Suisse said that it believes there will be a high conversion rate of jack-up rig options into firm contracts, driven by a shift towards more complex wells as well as a need for established drillers to regain market share.
The brokerage added that Keppel is well-positioned to win orders from Brazilian oil company Petrobras’ tender for 21 rigs due to the Singapore firm’s established operations in Brazil, strong execution capabilities and relationship with Petrobras.
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