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Noble Corporation plc Message Board

  • nysfparachute nysfparachute Mar 20, 2013 11:33 AM Flag

    FBR Capital comments

    Noble: Quantifying NE's compelling risk/reward profile; target raised to $50 at FBR Capital (36.19 )
    FBR notes NE offers a compelling risk/reward profile that cannot be passed up. In response to several investor inquiries, it has attempted to quantify the potential value that could be unlocked from a spin-off of non-core assets. FBR remains convinced that this is a 2013 event, based on its numerous conversations with NE mgmt. FBR's scenario analysis has cemented its belief that NE is the top way to play offshore drillers in 2013.

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    • Seems reasonable:

      The two companies:

      "Spinco. Our analysis assumes Noble spins off 21 older jackups, six floaters, and three other rigs. These rigs account for roughly 12% of our published 2014 EBITDA estimate, and we then apply a 4.6x 2014 EBITDA multiple. This represents the median multiple for Hercules Offshore's multiple, which has much-lower-spec jackup assets, and Rowan's multiple, which has more premium rigs."

      "Noble parent valuation. With respect to the remaining parent company, we believe it should trade similarly to higher-spec deepwater leveraged offshore drillers. Accordingly, we use a 7.1x 2014 EBITDA multiple, which is equal to the median multiple for Atwood Oceanics (NYSE: ATW), Seadrill (NASDAQ: SDRL), Ensco PLC (NYSE: ESV), and Ocean RIG (NASDAQ: ORIG)."

 
NE
16.790.00(0.00%)Apr 20 4:00 PMEDT