Noble

Noble: Credit Suisse maintains O/p but reduces TP to $2.25 from $2.80. Note that Noble is leveraged to industrials commodity demand growth, and see near-term downside risk to prices given macro uncertainties. However, view is that the backdrop remains consistent with a substantial dip in industrial commodity prices rather than change to supply-demand dynamics.

Believe the trading operations for industrial commodities could prove challenging in the near term, and house lowers margin assumptions for Noble’s industrials product segment, which, in aggregate, reduces earnings by 5-14% through FY13. Agriculture is the highest margin product segment for Noble, and should generate more than 30% of future gross profit, given rising contribution from its sugar assets, with prices supported by structural long-term fundamentals.

Noble’s stock has corrected sharply on the back of macro concerns, and is trading at two-year lows. House see the announced potential spin-off of its agriculture operations as a positive catalyst.