KUALA LUMPUR (Dec 7): Analysts have lowered their target prices for Sapura Energy Bhd (SEB) on reduced earnings forecasts after the company posted a widened nine months (9MFY19) loss.

MIDF Amanah Investment Bank Bhd Research revised its target price to 60 sen from RM1.01 and reiterated its Trading Buy call.

Meanwhile, RHB Research Institute Sdn Bhd lowered its target price to 46 sen (from 49 sen) and maintained a Buy call on the stock.

Yesterday the group said its 9MFY19 net loss widened to RM292.88 million from RM217.95 million in the previous corresponding period as a result of lower revenue from its E&C and drilling business segments.

“We are reducing our FY19 earnings forecast to -RM116.1mil due to the cumulative losses effect from the 9MFY19.

“However, we are maintaining our FY20 earnings forecasts at this juncture as we are expecting more meaningful earnings to be recognized next year due to the recent contract wins and pick-up in activity levels for both its Engineering & Construction and Exploration and Production (E&P) segment from FY20 onwards,” MIDF Research wrote in a note today.

MIDF said its target price revision is premised on the enlarged SEB’s share base in relation to the expected completion of the rights issue and RCPT-i at the end of this month.

“Additionally, we continue to believe that the share offers short term trading opportunities for investors as we opine that earnings could start to surprise on the upside sooner-than-expected,” it said.