HLIB sets RM6 target price for RHB Bank
KUALA LUMPUR: RHB Bank Bhd has an upside potential of 11.1 per cent, or a target price of RM6, based on its attractive valuations and ongoing transformation programme, said Hong Leong Investment Bank (HLIB).
The research firm said RHB Bank’s price-earnings ratio was 22 per cent lower against industry’s 12.4 times while its price-tobook ratio was a 32 per cent discount to peers’ 1.37 times.
“The expected benefits from its ongoing transformation programme and the end of impairment reinforced our projected FY17-19 earnings per share compound annual growth rate of 14 per cent,” it said in a note.
HLIB said RHB Bank shares had been gyrating within its upward channel.
“Following the double bottom formation and strong breakout above the neckline resistance near RM5.29 (September 21 high) and coupled with key multiple simple moving average closing, we are positive the share prices could stage a follow-through rally towards RM5.51 (February 27 high).”
“A strong breakout above RM5.51 would spur prices to test its 52-week high at RM5.61 (February 2) before reaching our LT objective at RM5.87 (double bottom breakout measurement),” it added.