Tuesday, September 28, 2010

Otto Marine

Otto Marine: DMG downgrades to Neutral from Buy, lowers target price to $0.39 from $0.46 after cutting FY10-12 earnings forecasts by 2-13% to reflect order cancellation, fewer contract assumptions. Notes Norwegian customer Mosvold Supply's intention to cancel order for vessel being built by Otto plus the highly leveraged position of Mosvold Supply has made it difficult for it to take delivery. Adds Otto has not secured any new shipbuilding contract so far this year.

But downside risk limited at $0.35 with much of the negative news already factored in price.

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