DBS analyst Zheng Feng Chee maintained a Buy rating on DFI Retail Group Holdings yesterday and set a price target of $3.60.
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Zheng Feng Chee’s rating is based on the strategic improvements and financial outlook of DFI Retail Group Holdings. The company has been actively refining its business portfolio, focusing on enhancing operational control and improving return on capital employed (ROCE) and total shareholder return (TSR). This has been achieved through divesting low-margin businesses, particularly in the Southeast Asian food segment, allowing for better management control and operational efficiencies.
Additionally, the company has lifted its profit guidance for FY25, indicating a stronger second half driven by seasonal high-margin sales. The focus on existing operations over mergers and acquisitions, due to high valuation risks, and the potential for special dividends further support the Buy rating. The revised target price reflects an optimistic earnings outlook and the potential for attractive yield, making the stock a compelling investment opportunity.
Feng Chee covers the Consumer Defensive sector, focusing on stocks such as PepsiCo, Thai Beverage Public Co, and Sheng Siong Group Ltd.. According to TipRanks, Feng Chee has an average return of -4.6% and a 53.57% success rate on recommended stocks.