Here’s what analysts have to say about Noble’s Q1 results

Are they impressed with better disclosures?

Noble Group reported its first quarter results yesterday. After a slew of attacks from short sellers, Noble pledged greater transparency by improving its disclosures.

Barclays analyst Ephrem Ravi noted that Noble’s improved disclosures will aid in better reflecting its true business mix and help its share price recover.

“[Its current] valuation implies a significant discount to peers and more than prices in recent concerns, which we believe should subside gradually with management’s pledge to improve its disclosure, in our view,” Ravi stated.

Jefferies Singapore equity analyst Abhijit Attavar called Noble’s Q1 results “a step in the right direction” but warned that Noble is not yet completely off the hook.

“We agree that there could potentially be questions raised on assumptions used in Noble's accounting of associate and derivative fair values, [but] we believe the current results were encouraging both in terms of disclosure and quality of earnings and are a step in the right direction,” Attavar said.

Attavar added that it is “encouraging” that Noble’s Q1 results was driven largely by recurring business flows, which presents a “truer picture” of Noble’s long-term earnings potential.

OCBC analyst Carey Wong noted that it would take time for investors to grasp Noble’s new disclosure practices.

“For this quarter, Noble has further divided its existing businesses into more distinct segments. However, we believe that the market will still need time to fully make sense of these numbers
and how relevant these are to understanding the company’s business,” Wong noted.