Ke­nanga re­tains ‘out­per­form’ on Petronas Da­gan­gan

New Straits Times - - Business -

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

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