Stock Upgraded: NOL rating of neutral by Credit Suisse!

Credit Suisse said it has upgraded its rating on Neptune Orient Lines (NOL) to "neutral" from "underperform" and at the same time raised its 12-month price target to 2.20 sgd per share from 2.0 sgd previously. In a recent note to clients, Credit Suisse said the 39 pct year-on-year decline in NOL's first quarter net profit to 120 mln usd was not as bad as it had anticipated. "This is mainly due to better than expected operating cost controls," Credit Suisse. Notwithstanding the upgrade in its rating and price target, Credit Suisse said it is too early to re-accumulate NOL given that the company has given a cautious outlook. "Asia-US (container shipping) rates, which held up well in the first quarter are expected to see year-on-year declines from the second quarter onward as new contracts become effective," Credit Suisse said. "We believe, based on conversations with our industry contacts, that new Asia-US rates are in general likely to be some 8 pct lower year-on-year," it said. "Despite some recovery from their recent low point, Asia-Europe rates remain 10 pct lower year-on-year. Further, bunker prices are now higher and margins are being compressed," it added. At 11.48 am, NOL was up 0.04 sgd or 1.85 pct at 2.20 with 279,000 shares traded.