NBK raises DP World fair value estimate

THUMBS UP: Analyst raises 'fair value' estimate for port operator DP World. (Getty Images)

NBK Capital has raised its fair value estimate on Dubai government-controlled port operator DP World by 20 cents, saying it was due to a change in its capital expenditure assumptions for the company.

Analyst Samir Murad raised his fair value estimate on the stock to 55 cents from 35 cents, and said he lowered the average cost for additional capacity from $275 per twenty-foot equivalent unit (TEU) to $175 per TEU.

"Signs of a bottoming process for the decline in throughput levels have started to emerge, as DP World has announced considerably better volumes in the second quarter of 2009, over the first quarter," said Murad in a note dated Oct 6.

However, the bleak outlook for the non-container side of the business remains an obstacle for the company, added Murad, who has a "hold" rating on the company.
 
Shares of DP World closed at 58.5 cents Wednesday in Dubai. (Reuters)

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