CGS-CIMB analyst Lim Siew Khee reiterated a Buy rating on Seatrium Limited (SMBMF – Research Report) yesterday and set a price target of S$2.90.
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Lim Siew Khee’s rating is based on several strategic developments and positive indicators for Seatrium Limited. The company has recently announced a Memorandum of Understanding with BP for a second floating production unit, which highlights its strong track record and relationships with major oil companies. This potential contract, valued between US$750 million and US$850 million, signifies Seatrium’s capability in handling complex engineering projects.
Furthermore, Seatrium’s AmFELS yard in Texas is nearing completion of a significant project, the first US-flagged wind turbine installation vessel, which could enhance its reputation in the commercial ship repairs sector. The anticipation of future contract bids, such as the Petrobras FPSO tender, alongside the resolution of ongoing investigations, are additional catalysts that could lead to re-rating. These factors, combined with a strong earnings delivery and margin expansion, underpin Lim Siew Khee’s Buy recommendation.
In another report released on January 28, DBS also reiterated a Buy rating on the stock with a S$3.00 price target.