Olam

Olam:UBS downgrades to Sell from Buy and reduces TP to $1.33 from $2.95 citing a "growing number of concerns" relating to the commodities supplier's earnings quality and growth. House say cost overrun and project delays significantly increase the risk to management's target of generating positive free cash flow by FY15. Citing World Bank estimates they say Olam's Gabon fertilizer project may now cost between US$1.5b and US$2.0b vs Olam's US$1.3b estimate. Add that employment of a bankruptcy analysis reveals that Olam's financial position has deteriorated to below financial health levels, but remains above distress levels.