Noble Group

Noble Group: UBS has a Buy rating with $1.25 TP. House views that the counter provides exposure to a global cyclical recovery through a diversified commodities trading operation, focussed on hard, soft and energy commodities. Over the past four years, Noble has grown traded volumes by around 23%, however as a result of declining margins, earnings have fallen 49% over the same timeframe. Leading into 2014, UBS believe a global cyclical recovery will lead to a gradual appreciation in commodity pricing, and support volume increases in traded commodities. Noble is well positioned to capitalise on increasing global traded volumes, and house believe increasing commodity prices will support margins across key businesses. Across Noble’s key divisions, UBS expect the agricultural division to return to profit in 2014, stemming a loss in 2013 that resulted from a combination of weak sugar pricing during H113, an operational ramp up of sugar assets, and infrastructure bottlenecks in Argentina which weighed on earnings.