SembMarine: DMG maintains their sell rating with TP of $3.73, note that for short term, share price will be boosted by news of the 2 jack-up contracts, however cautions about the sustainability of any positive share price performance as order books are moving away from the high margin orders secured in 2007-2008 with annual rate of order replenishment substantially below peak levels….
Notes that PE valuation at 17X FY11 is unattractive as in the past 2 cycles when grp traded above 16X PE, net order book grew 27-133%....
Credit Suisse also unfazed with the new contracts, maintain neutral rating with TP of $4.25, highlights that even if all 3 additional options were exercised by Atwood for 3 more jack ups, it would bring YTD orderwins to just $2.2b, still below their $2.5b forecast.
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