KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform on SapuraKencana Petroleum with a target price of RM4.80.
It said on Tuesday it continue to value the stock at 21.8 times CY14 price-to-earnings (P/E), a 40% premium over our CY14 target market P/E of 15.6 times but still within the historical P/E range for oil & gas big-caps.
“Strong order book momentum and more opportunities in Brazil are the re-rating catalysts that support our rating catalysts that support our Outperform call,” it said.
CIMB Research advised investors to stay invested. It added SapuraKencana is an attractive growth story, offering a three-year EPS CAGR of 36.2% versus an industry average of 19.8%.
“Investors looking for companies with solid and long-term order books will not be disappointed with SapuraKencana given that its order book will last up to FY1/32, including the extension for the new contract in Brazil,” it said.
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