Wee Kuang Tay, an analyst from CGS-CIMB, reiterated the Buy rating on DBS Group Holdings. The associated price target was raised to S$54.90.
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Wee Kuang Tay’s rating is based on a combination of factors that highlight DBS Group Holdings’ strong financial performance and strategic initiatives. Despite a slight year-on-year decline in net profit, the company’s results were in line with expectations, and it demonstrated resilience in managing net interest income growth amidst net interest margin compression. This was achieved through effective balance sheet management, matching the growth of interest-bearing assets with liabilities.
Furthermore, DBS has shown promising growth in non-interest income, particularly in wealth management fees, which exceeded guidance expectations. The company’s cost-to-income ratio also remained favorable, and its capital return initiatives, including a significant share buyback program and dividend hikes, are well-supported by its robust capital position. These factors, combined with a lower cost of equity assumption, contribute to a positive outlook for DBS, justifying the Buy rating with an increased target price.