Mermaid has declared its first half profit will be around $55m. The broker continues to see near term vessel tendering opportunities in WA LNG but after 2015 spending will decline and so too Mermaid earnings. Long term support revenues should temper that fall nevertheless.
Mermaid looks cheap but the broker retains Neutral while cutting its target to $1.34 from $2.15, noting it's still too early to fully gauge the impact of lower oil prices.
Target price is $1.34 Current Price is $0.81 Difference: $0.53
If MRM meets the Macquarie target it will return approximately 65% (excluding dividends, fees and charges).
The company's fiscal year ends in June. Macquarie forecasts a full year FY15 dividend of 11.00 cents and EPS of 21.70 cents. At the last closing share price the estimated dividend yield is 13.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.73.
MRM Price at posting:
81.0¢ Sentiment: Buy Disclosure: Held
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