O&M: Operating conditions in the O&M industry remain challenging as E&P spending is cut across the sector. Also, oil price forecast cuts suggest global oil companies/offshore drillers should remain cautious on their capex plans well into 2016, which will likely have negative implications on the downstream O&M service providers.
Deutsche has lowered its earnings forecasts for stocks under its coverage and target prices are below the Street.
The house believes Keppel Corp (Hold, TP:$7.00), Sembcorp Industries (Hold, TP:$3.65) and Sembcorp Marine (Sell, TP:$2.00) are better positioned to ride out the storm with their relatively stronger balance sheets, continued investment in capabilities and healthy brand recognition.
Smaller names like Cosco Corp (Hold, TP:$0.36) and Ezra (Hold, TP:$0.13) may face comparatively more headwinds as they juggle with gearing/liquidity issues and industry challenges.
No comments:
Post a Comment