Maybank is urging shareholders of Keppel to “sell the stock into strength” as its stock price rally is “unsustainable”.
In a Wednesday report, analyst Yeak Chee Keong says Keppel’s recent surge from its $4.71 low was driven purely by oil price sentiments.
“This is unsustainable as rig building fundamentals have not improved and EPS is likely to be subjected to further consensus downgrades in FY16,” says Yeak.
Maybank is cutting FY16-17 estimated EPS by 6-7% while raising FY18 estimates by 2% as it factors in deferments for five Transocean jackups, one Ensco jackup and two Golar FLNGs.
Meanwhile, rig day rates are not expected to rise until 2019 as the industry has to deal with a rig-supply glut.
Even an oil price rebound of US$40-50/bbl level is not expected to be sufficient to generate confidence for new rig orders.
As at 10.02am, Keppel is up 1.9% at $5.89.
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In a Wednesday report, analyst Yeak Chee Keong says Keppel’s recent surge from its $4.71 low was driven purely by oil price sentiments.
“This is unsustainable as rig building fundamentals have not improved and EPS is likely to be subjected to further consensus downgrades in FY16,” says Yeak.
Maybank is cutting FY16-17 estimated EPS by 6-7% while raising FY18 estimates by 2% as it factors in deferments for five Transocean jackups, one Ensco jackup and two Golar FLNGs.
Meanwhile, rig day rates are not expected to rise until 2019 as the industry has to deal with a rig-supply glut.
Even an oil price rebound of US$40-50/bbl level is not expected to be sufficient to generate confidence for new rig orders.
As at 10.02am, Keppel is up 1.9% at $5.89.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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