SGX-listed Wilmar International Limited (SG:F34) is a prominent agricultural company operating across Asia, boasting a vast network of over 500 manufacturing plants. Yesterday, the company received confirmation of a Buy rating from DBS, indicating additional growth potential for the stock. Overall, the stock carries a Strong Buy rating on TipRanks.
The company specializes in a diverse product portfolio, encompassing edible oils, rice, condiments, flour, sugar, and various other offerings.
DBS Reaffirms Buy Rating
Yesterday, William Simadiputra from DBS reiterated his Buy rating on the stock, forecasting a growth of 44% in the share price.
Simadiputra believes the company will recover from the correcting margins and the expected robust performance from its Chinese subsidiary, Yihai Kerry Arawana, in the second half of 2023.
He also stated that the company is facing temporary weakness, which might be reflected in its upcoming earnings report for the second half of 2023. However, the company has significant opportunities for expansion in its integrated food products platform through its downstream division. This includes consumer products and central kitchen operations. He is also bullish on the company’s plan to open 20 central kitchens in China over the next five to six years.
He added, “Wilmar will be able to capitalize recovering edible oil market next year, driven by China’s edible oil demand recovery.”
Simadiputra is anticipating a 23% year-on-year improvement in Wilmar’s earnings, reaching S$2.69 billion in the fiscal year 2024. This should also boost the company’s share price, as he believes any short-term earnings weakness is “already priced in.”
Wilmar International Share Price Target
F34 stock has a Strong Buy rating on TipRanks, backed by all four Buy ratings. The average target price is S$5.04, which is 37% higher than the current trading level.
Conclusion
Despite the fluctuations in commodity markets, the company achieved consecutive years of increased profits. Furthermore, there is potential for improved margins as commodity prices show signs of relief.
Following DBS’s positive endorsement, investors may want to consider the stock for improved returns.
