Goldman Sachs: Downgrade Genting Singapore and Genting Malaysia to Sell
Conventional wisdom would suggest buying Genting Singapore. However, we think the market is pricing in a very positive outcome for Integrated Resort, hence our downgrade to Sell from Neutral. Our 12-m Sum Of The Parts-based Target Price is revised to S$0.65 from S$0.44.
For Genting Malaysia, we think the market may be taking an overly optimistic view of its Malaysian casino operations, where we see significant cannibalization risk. Our earnings are significantly below I/B/E/S consensus and, as a result, we downgrade Genting Malaysia to Sell from Neutralwith a revised 12-m SOTP-based TP of MYR2.60 from MYR2.80.
We maintain our Neutral rating on Genting, but raise our 12-m NAV-based TP to MYR6.60 fromMYR4.80. Key upside risks to Genting group: better-than-expected Singapore Integrated Resorts opening, lower-than-expected cannibalization risk at its Malaysian casino. Downside risks for Genting: poor non-gaming earnings.
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NRA Capital's forecast for Leeden's financials.
A bevy of beauties at Leeden's booth at a recent industry exhibition. Photo by Sim Kih
NRA Capital upgrades Leeden from ‘hold’ to ‘buy’
With steady increasing topline, we think that Leeden has bucked the trend for companies servicing the marine, oil & gas sector. We are also positive on the company’s prospects.
We have adjusted our revenue forecasts for the next 3 years upwards by 2.7% to 11.6%.
EPS forecasts also increased correspondingly. We value Leeden at $0.42 based on 6.2x FY09F P/E, a 10% discount from its peer average of 6.9x because of its smaller market cap.
This is a 27% potential upside from its current share price. We upgrade our recommendation on the stock from HOLD to BUY.
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Deutsche initiates coverage of Ezra with optimistic profit forecast
Ezra's recent new growth strategy announcement on the subsea market marks a strategic and transformational move to focus on one of the fastest growing segments of the O&M sector, and we expect earnings to benefit.
At 7.1x FY2010E PER, with an EPS CAGR of 41%, and trading towards the lower end of its historical range, we believe valuations are attractive. Initiate with a Buy. Our FY2011E earnings estimates are around 50% above the market’s and we expect Street forecasts to rise over the coming year as Ezra’s plans begin to materialize.
We have set Ezra’s target price at S$2.50, which is derived by averaging the estimated values of the PEG and Gordon Growth model methods. Risks include vessel delivery delays, execution, any unexpected offshore mishaps, a sustained plunge in oil prices, and any unexpected departures of key executives.
Recent story: LEEDEN: 1H09 core revenues jump 48%
