CIMB IB Research upgrades Sapura Energy to Add, trims target to RM1.42

-A +A

KUALA LUMPUR (Dec 8): CIMB IB Research has upgraded Sapura Energy Bhd (SAPE) to “Add” at 97 sen with a lower target price of RM1.42 (from RM1.63) and said SAPE’s 9MFY1/18 core net loss of RM186 million underperformed, as it was almost four times higher than house previous loss forecast, while consensus had forecast a profit.

In a note today, the research house said engineering and construction margins weakened more than expected, leading it to downgrade earnings forecasts materially, and also cut its SOP-based target price to RM1.42.

“While conditions remain tough, we upgrade the recommendation from Hold to Add as long-term value is now emerging from the sharp sell-off yesterday afternoon.

“We expect narrowing losses from FY19F onwards to help lift the share price,” it said.