Noble Group

Noble Group: Noble Group is moving closer to the disposal of a 51% stake in its loss-making agri business and subsequent de-consolidation (which it announced in Apr 2014) and it expects the transaction to complete by end-2014. Barclays have incorporated the transaction in its estimates with 2015 being the first year of a clean profitability picture after the transaction. To summarise, the transaction will eliminate agri losses equivalent to c.56% of its 1H14 reported headline net income, while debt reduction could cut its interest expense by 25%. All this will result in 2015E ROEs moving into double-digits, on its estimates. The 2015E P/B would be at a 32% discount to its 8-year average and 50% below the level as recent as the 2011 average, while house see ROEs climbing back to historical averages. Barclays reiterates its Overweight rating and unchanged TP of $1.60.