Kenanga retains ‘outperform’ on Petronas Dagangan
KUALA LUMPUR: Kenanga Research has maintained an “outperform” rating on Petronas Dagangan Bhd with a higher price target of RM26.70 per share, following its stellar financial performance in the first quarter (1Q17).
Petronas Dagangan recorded a pre-tax profit of RM335.6 million for the three months ended March 31 against RM295.6 million in the same quarter last year.
Revenue rose to RM6.69 billion from RM4.91 billion previously.
The research house said the group presented yet another solid set of results for the first quarter, as business volume remained healthy despite a six per cent decline from the preceding quarter.
The second quarter was expected to remain solid, given the probability of high traffic volume during the school holidays and Hari Raya festivity break, it said.
The research house said all these were catalysts to Petronas Dagangan’s share price in the near-term while long-term earnings sustainability was supported by volume growth and operational efficiency.
“Our new price target is now RM26.70 per share from RM26.63 per share previously. We continue to give the stock an ‘outperform’ rating given its resilient business volume.
“The weekly pump price review should help mitigate inventory cost shock to ensure better profit earnings,” it added.
At yesterday’s close, Petronas Dagangan’s share price rose 68 sen to RM24.76. Bernama