Morgan Stanley Trims Price Target on Acergy, Keeps "Underweight"

03 September 2010

Morgan Stanley downgraded its share price target on Oslo-listed oil service company Acergy SA to NOK109 from NOK117, reaffirming its "underweight" recommendation.

Morgan Stanley has maintained its "underweight" rating on Acergy and sector player Subsea 7 which have announced their intention to merge, as it expects a visible improvement in the subsea market not earlier than in 2012 or 2013.

The market consensus for the income in 2011 is too optimistic, according to the broker. The daily rates have fallen by 25% since 2008, which is expected to lead to a margin drop for Acergy and Subsea 7.

In June 2010, Acergy and Subsea 7 unveiled plans to merge, creating a 54/46 combined entity, respectively. The transaction is expected to be completed towards the end of this year or the first quarter of 2011.

By 09:14 CET today, the stock in Acergy had gained 0.98% to NOK103.30 on the Oslo Stock Exchange and the shares in Subsea 7 had edged up 0.18% to NOK108.40.