FIRST RESOURCES | NEUTRAL
TARGET PRICE: S$2.30
NOV 2 CLOSE: S$1.96
Credit Suisse, Nov 2
We reduce our rating on the stock to "neutral", even though the target price has been raised to $2.30 (from $2.10), equalling 16 times 2018E price-to-earnings (P/E) ratio, due to its already limited potential upside.
We derive our target price using the two-year average multiple of the stock (2015-17), which we believe is warranted to see valuation normalisation with the fluctuation of crude palm oil prices.
The new target price equates to eight times enterprise value-to-earnings before interest, tax, depreciation and amortisation (EV/Ebitda) 2018E with the EV/hectare at US$15,269. Our earnings per share (EPS) declines 13.6 per cent/15.7 per cent in 2017-18E.
OUE HOSPITALITY TRUST | BUY
TARGET PRICE: S$0.85
NOV 2 CLOSE: S$0.815
DBS Group Research, Nov 2
With a better than expected results and in excess of 10 per cent total return over the coming 12 months, we maintain our "buy" call with a revised target price of $0.85.
We continue to like OUEHT for its relatively high 6.3 per cent yield, quality portfolio and management, as well as its robust underlying distribution per unit (DPU) growth profile.
FRASERS LOGISTICS & INDUSTRIAL TRUST | BUY
TARGET PRICE: S$1.22
NOV 2 CLOSE: S$1.115
OCBC Investment Research, Nov 2
FLT reported its Q4-17 results which met our expectations. If we look at the period from listing (June 20, 2016) to Sept 30, 2017, DPU came in at 8.85 Singapore cents, which beat FLT's initial public offering (IPO) forecast by 6.1 per cent.
Operationally, FLT maintained a high portfolio occupancy of 99.4 per cent, with a long weighted average lease expiry (WALE) of 6.75 years.
Although average rental reversion was -15.9 per cent in Q4-17 and -8.2 per cent for the 12-month period in FY17, we believe it was largely due to rents reverting back to market levels upon lease expiry as built-in annual rental escalations for FLT's leases typically outpace market rental growth.
We will provide more details after the analyst briefing.
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
Compiled by Claire Huang The Business Times