O&M: With the WTI crude price below US$40 and likely to remain lower for longer, CLSA has slashed earnings and targets for most stocks under its coverage.
However, share prices are starting to reflect the sharp decline in fortunes and value is beginning to appear for some names.
House upgraded Ezion (TP: $0.98) from Outperform to BUY; Keppel Corp (TP: $6.50) from SELL to Underperform; and Sembcorp Industries (TP: $3.54) from Underperform to Outperform.
However, Sembcorp Marine (TP: $1.77) and Nam Cheong (TP: $0.13) remain SELLs.
Also, with growing concerns about the Chinese economy, CLSA downgraded Yangzijiang (TP: $1.09) from Outperform to Underperform.
Investors are advised to stay away from the O&M sector for the time being.
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