DBS analyst Zheng Feng Chee has maintained their bullish stance on DFIJ stock, giving a Buy rating on June 4.
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Zheng Feng Chee has given his Buy rating due to a combination of factors influencing DFI Retail Group Holdings’ potential for growth and value creation. The company has recently divested from non-core businesses, which has resulted in significant cash reserves that can be strategically reinvested or distributed as special dividends. This financial flexibility positions DFI well to enhance operational efficiencies and improve return on capital employed (ROCE) and total shareholder return (TSR).
Moreover, DFI’s streamlined business portfolio is expected to drive earnings growth, with adjusted core earnings for FY25 and FY26 reflecting positive impacts from divestments and strong first-quarter performance. The focus on existing operations over potentially high-risk mergers and acquisitions is seen as a prudent strategy, given the elevated valuations of potential targets. Additionally, the potential for special dividends further supports the Buy rating, with an attractive yield anticipated over the next few years. These factors, combined with a revised target price, underscore the positive outlook for DFI’s stock.
In another report released on June 4, UOB Kay Hian also maintained a Buy rating on the stock with a $3.50 price target.
DFIJ’s price has also changed slightly for the past six months – from $9.170 to $9.170, which is a 0% increase.