Noble

Noble: UBS upgrades Noble from Sell to Neutral as prices have corrected significantly since Jun14. Though industry outlook remains bleak, market volatility and a shift to contango structure may become beneficial for traders. Lower energy prices risks write-downs due to asset revaluations with Oil, Gas and Power as the largest contributor to Noble’s energy business (~70% Revenue/82% operating income). Lower refining margins pressure core margins. However, volatility may generate trading interest and contango and the availability of storage facilities should lift Noble’s trade book. Catalysts are trading gains, risks are sustained depression in energy prices. TP based on P/B is $1.07.