UBS Remains Sidelined on Noble Corp (NE) - PT to $5
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UBS maintained a Neutral rating on Noble Corporation (NYSE: NE), and cut the price target to $5.00 (from $6.00), as conditions remain challenging. However, Floater opportunities are emerging in 2H-17, with NE "optimistic" on winning incremental work for its warm-stacked rigs.
Analyst Angie Sedita commented, "Conditions remain challenging with anemic rig demand for floaters over the near term to intermediate term. We believe the major oils will not return to the deepwater markets until oil prices rise to $60-$65/bbl, likely in 2019-2020. In the meantime utilization is likely to continue to decline throughout 2017 and potentially into 2018. Noble is sharply cutting 2017 operating costs (12% below our original forecast), cutting CAPEX (down 40%) and has eliminated its nominal dividend. Cash preservation mode remains the focus. On our current forecasts the company remains cash flow positive."
Shares of Noble Corporation closed at $4.74 yesterday.
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