DBS Vickers reinstated coverage of Ezra Holdings with a ‘buy’ rating and target price of $1.30, saying it sees a gradual earnings recovery which could lead to a narrowing discount to book value and drive share price upside.
Shares of the oil services provider were up 1.9% at $1.07 on Wednesday. So far this year, the stock has increased 27%, in line with the 28% gain in the FT ST Mid Cap Index.
DBS said it expects catalysts from strong subsea order momentum and improving demand-supply dynamics in the offshore support vessel charter markets, which support firmer day rates since 2011.
Ezra’s offshore support division is expected to post improved profitability and balance sheet concerns are easing with the recent refinancing of convertible bonds, DBS added.
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