Genting SP

Genting SP: Bloomberg highlights that the difference between analysts‘ target price forecasts and Genting’s (GENS) share price narrowed yesterday to its lowest level since Dec ’13, with average consensus TP at $1.24 versus yesterday’s closing price of $1.155. Some analysts however opined that the recent 12% rally, which was sparked by GENS’ share buyback, could be short-lived weighed by a slump in Chinese visitors and a lack of visible catalysts for the group’s outlook ahead, adding that valuations are not cheap at 23.1x forward P/E versus peers Sands China 18.1x and Galaxy Entertainment at 19.5x. Yet, some fund managers are guiding that the downside for GENS appears limited, as the recent share buyback could provide support in the short-term, and could also signal management’s confidence on the long-term outlook of the group. Maybank-KE opines that while it may be too early to call for a bottoming out in earnings, growth is likely to be stable in the upcoming quarters, led by rising growth in mass-gaming market revenue and the opening of GENS’ 550-room hotel in Jurong, adding that GENS’ hotels in RWS saw a 95% occupancy rate in 3Q14. In a recent report by a foreign broker, GENS should buy its shares below the $1.25 mark, as beyond that, the benefit of EPS accretion would be less meaningful when compared against the cash yield of the group.