Company Name: SAPURAKENCANA PETROLEUM BHD
|Research House: KENANGA||Price Call: BUY||Target Price: 3.82|
Kenanga Research raised the target price for SapuraKencana Petroleum Bhd to RM3.82 from RM3.42 after a financing structure was announced for the company's US$2.9 billion purchase of tender-rigs from Seadrill Ltd.
"We are tactically raising our target price to accommodate the potential earnings accretion from the new rigs," said Kenanga in a report on Wednesday. Kenanga maintained its 'outperform' call on the stock.
SapuraKencana, Malaysia's largest oilfield service provider, will see its debt increase to RM5.7 billion from the acquisition, said Kenanga. The brokerage maintained its earnings forecast for the company, in spite of the higher borrowing costs.
Shares of SapuraKencana rose 1.4 per cent to RM2.89 as of 9.44am, while the benchmark index was up 0.54 per cent.--Reuters