Noble

Noble: Most analysts have hailed Noble's decision to spin off its agricultural business as a positive one as it could alleviate funding needs for the expansion of its agribusiness portfolio. Agribusiness accounts for a third of Noble's earnings and at least one house noted that the division may have a value of more than US$5b.

Nomura note that the move could be good for Noble's valuations as agriculture assets 'generally command a higher valuation multiple as compared to a non-agri portfolio. Add that Noble's current valuation is about 7.6x its FY12E P/E, a multiple that it believes is not justified. The agribusiness spinoff may help to shift the company's multiple to a higher band.

UBS meanwhile note that one reason to list its agriculture assets may be to secure a better valuation for its energy business that is equivalent to the sector's peers. A spinoff could make Noble a more relevant comparison to coal producers trading at 10-12x P/E, rather than Glencore at below 7x. DBS add that the listing could help Noble fund the expansion needs of its agribusiness and a possibility of debt retirement at the holding company level, resulting in interest savings. Citi maintains Buy with $2.36 TP.