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2012 March 28   11:53

Nomura initiates coverage of STX OSV with a reduce rating

Nomura initiates coverage of Singapore-listed offshore vessel builder STX OSV Holdings Ltd with a reduce rating and a target price of S$1.68, Reuters reports. STX OSV's shares have risen 53 percent so far this year to close at S$1.78 on Monday.

"Although the outlook for the company and the offshore support industry remains relatively positive, order book replenishment remains a concern," Nomura said in a report.

The broker said new contracts secured so far this year only accounts for 10 percent of Nomura's order win assumptions.

It said STX OSV's valuations also look lofty, as it is trading at 8.7 times its 2012 forward price-to-earnings ratio, the high end of its historical PE band of 4-9 times.

Out of 12 brokers tracking the stock, 11 have a buy or strong buy and one has a hold rating.

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