Ezra

Ezra: Daiwa reiterates its SELL rating for Ezra Holdings, backed by underperformance of 9MFY14 results and lower EBITDA margin forecasts. The house notes that 3QFY14 margin missed Bloomberg consensus by 23% and Daiwa adjusts down EBITDA margins for subsea segment for FY14-16. The house also raised the EV/EBITDA multiple for the OSV business from 7x to 8x to be in line with the EV/EBITDA multiple derived from the EOC consolidation. Although the adjusted TP at $0.87 has 12% upside from current price, Daiwa maintains SELL rating on grounds of high valuation. $0.87 is 10.7x FY14E EV/EBITDA while its global subsea peers’ average is 9x.