Citi cuts Sembcorp Marine target price

Citi cuts Sembcorp Marine target price

SINGAPORE - Citigroup cut its target price on rigbuilder Sembcorp Marine Ltd to $5.40 from $6.10 and kept its 'buy' rating, citing smaller revenue recognition and lower margin assumptions.

By 0259 GMT, Sembcorp Marine shares were flat at $4.39 and have risen 15 per cent since the start of the year, compared with the Straits Times Index's 13.4 per cent gain.

Citi cut its 2012-2013 earnings per share estimates for Sembcorp Marine by 4-11 per cent, but raised its 2014 estimates by 6 per cent to account for higher repair contributions and drillship sales.

The brokerage expects Sembcorp Marine's earnings to bottom this year and see a strong rebound in 2013-2014, adding that it was "upbeat on the exploration and production cycle and believe it will continue into 2013, underpinned by demand for broad mix of products."

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