Thursday, August 19, 2010

SMRT/ Comfort Delgro

SMRT/ Comfort Delgro: RBS downgrades SMRT to Sell from Hold, cuts target to $1.80 vs $2.25 after reducing FY11-13 earnings estimates by 10-19%. Says Singapore govt’s changes to rail operating system will reduce profitability of future rail concessions, resulting in loss of key driver for SMRT's long-term profit growth. Adds SMRT's new Circle Line expected to operate at loss for extended period…

Stock currently out of favor, with half the Street rating as Sell, and other half recommending Hold. Consider switch to Comfort Delgro which has more diversified operations. KE has Buy call with $1.87 target.

Stock is trading at 0.86x P/B & 28x FY10 P/E, which is not exactly cheap.

No comments:

Post a Comment