Our FY2011E earnings estimates are around 50% above the market’s and we expect Street forecasts to rise over the coming year as Ezra’s plans begin to materialize. The group has a good execution track record over the years and we believe there is plenty of room for a positive re-rating as their earnings accelerate, moving them up towards the O&M mainstream names.
Global subsea spending in the next five years should rise >70% over the previous five years. Subsea spending should total about US$160bn from 2009 to 2013, and 3,222 subsea trees are due to be installed during this period. With its upcoming high specification vessels, enhanced know-how and expertise, and good execution track record, Ezra should be in a strong position to benefit.
We have set Ezra’s target price at S$2.50, which is derived by averaging the estimated values of the PEG and Gordon Growth model methods. Risks include vessel delivery delays, execution, any unexpected offshore mishaps, a sustained plunge in oil prices, and any unexpected departures of key executives.
Click here for more Offshore Marine Stocks Technical Analysis
Sponsored Links
Comments
No response to “Ezra - The subsea rises”
Post Comments (Atom)
Post a Comment |
Post a Comment