Wilmar International, the Consumer Defensive sector company, was revisited by a Wall Street analyst on July 18. Analyst Wee Kuang Tay from CGS-CIMB downgraded the rating on the stock to a Sell and gave it a S$2.70 price target.
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Wee Kuang Tay has given his Sell rating due to a combination of factors impacting Wilmar International’s performance. The primary concern is the heightened regulatory risks in Indonesia, where ongoing investigations and land confiscations are creating uncertainties. These issues, coupled with the volatility of commodity prices influenced by US tariffs and geopolitical tensions, have clouded the company’s outlook.
Additionally, the expected decline in net profit for the second quarter of 2025, driven by lower margins in soybean crushing and palm refining, further supports the Sell rating. Despite a stake increase in an Indian associate, which holds long-term growth potential, the premium pricing and current challenges overshadow the positive aspects. Consequently, the target price has been adjusted downward to reflect these increased risks and uncertainties.