STX OSV: JP Morgan initiate with O/w call and $2.00 TP, citing leader amongst the crowd. Tip grp as likely beneficiary of next leg of offshore capex and as one of the major global high-end designers and developers of OSVs, used in the offshore oil and gas E&P and oil services industries…..
Add that grp best positioned to benefit from return of potential OSV capex cycle; STX OSV’s Brazil yard provides long term upside option and tip Operating Margins to surprise on the upside in FY11E / 12E. Grp trades at compelling valuations with a steep discount to its Spore peers (trades at 6.9x FY11E PE vs Spore yards at 14-16x).
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