Singapore Stock Market News

Noble Group - Positives priced in

StockFanatic
Publish date: Wed, 02 Apr 2014, 05:55 PM
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In a highly-anticipated move amid the recent wave of global consolidation in the agribusiness, Noble has entered into a sale agreement with Cofco, China's largest grain trader, to dispose of 51% of its agribusiness (Noble Agri) for an interim payment of US$1.5bn. The deal values the business at 1.15x FY14 P/BV. Financially, the positives for Noble include a lower gearing, interest savings and an improved earnings profile as Noble Agri's losses can now be shared.

However, at current valuations of 1.1x CY14 P/BV, 10% above international peers, we believe that such positives have been priced in. We downgrade Noble to Hold from Reduce, with a higher target price (now at 1.2x CY15 P/NTA, ~1 s.d. below its 5-year mean; prev. 1.1x CY15 P/NTA). De-rating catalysts are expected from weakness in its metals, minerals & ores business. Pending deal completion, we keep our FY14-16 core EPS.
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Jenny Mcdonne

Post removed.Why?

2014-04-03 15:57

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