SMM: Citi raises TP to $5.90 from $4.76, keeps at Buy. Says despite the rise in share price, it believes improved order win prospects have yet to be fully discounted, with contracts wins having the potential to exceed consensus expectations. The house increases order book estimates by 30-40% over 2012-13E, expects a win rate of $5.5 – 6b over 2012-14, comparable to the previous peak cycle.
Reiterates that semi-sub new build demand will emerge this year and regain mkt share after years of underinvestment, underscored by the rise in day rates and sharp fall in uncharted supply.
Adds, SMM is better positioned to benefit from a resurgence in semi-subs than an up-cycle in jackups, given the popularity of its F&G rig designs.
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