Ezion: clsa cut its earnings estimates for Ezion on account that the challenging 2015 has plagued the company with delivery delays and higher risks of contract cancellation, on the back of the sharp fall of Brent prices.
The house revised down its TP from $1.34 to $1.18, 27% below the consensus and cited that street earnings estimates are overly optimistic.
While the recent downtrend in share price captures the risks, the house sees no catalysts to drive the stock either.
Fundamentally, execution has improved of late, with three rigs being delivered in 2Q15, the seven rigs scheduled for 2H15 delivery are likely to slip by three to four months. Further, six rigs from the existing fleet are not working for various reasons, implying utilisation for FY15 will be subpar.
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