Monday, May 15, 2006

Stock Downgraded: NOL fair value reduced to 2.07 by Morgan Stanley!

Morgan Stanley said it has cut its 12-month fair value for Neptune Orient Lines Ltd (NOL) to 2.07 sgd per share from 2.22 previously but kept its "equal-weight" rating on the stock. "The potential share price downside of 9 pct to our target price should be mitigated by a prospective dividend yield of about 4 pct for each of the next two years," Morgan Stanley said in a note to clients. Morgan Stanley said NOL's stock price does not look attractive relative to the container shipping sector and said it has cut its EPS estimates for NOL by 5-7 pct for 2007-2008 in view of rising bunker fuel prices. NOL reported its first-quarter net profit fell 39 pct year-on-year to 120 mln usd as container shipping rates softened and bunker fuel costs soared. At 11.48 am, NOL was down 0.10 sgd or 4.37 pct at 2.18 with 1.61 mln shares traded.

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