Analyst Paul Chew of Phillip Securities maintained a Buy rating on Comfortdelgro, with a price target of S$1.62.
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Paul Chew has given his Buy rating due to a combination of factors impacting ComfortDelGro’s performance. Despite some challenges, the company has shown strong growth in the UK market, where operating profits increased significantly due to higher margins from repriced London bus routes and contributions from recent acquisitions like Addison Lee. This growth in the UK is a positive indicator for the company’s future earnings potential.
In contrast, the Singapore market has faced headwinds, including a reduction in the taxi fleet and the loss of a bus contract. However, the company is expected to benefit from resolving driver shortages in Australia and new contracts in Manchester and Stockholm. These factors, combined with the potential for synergies from acquisitions, support the Buy rating, even as the target price is slightly adjusted to account for lower operating margins and increased interest expenses.
In another report released on November 13, DBS also maintained a Buy rating on the stock with a S$1.80 price target.