ComfortDelgro – BT

ComfortDelGro shares up after good results

SHARES of ComfortDelGro continued to climb in trading yesterday after posting a fairly strong performance for the second quarter ended June 30.

They closed three cents higher at $1.60, having been on an upward trend since July 6 last year when it closed at $1.26.

Both DBS Group Research and Deutsche Bank called a ‘buy’ on the land transport giant with target prices of $1.83 and $1.75 respectively, while JP Morgan maintained an ‘overweight’ with a target price of $2.

‘We should continue to see good year-on-year growth continuing into Q3 2009, albeit at a slower rate, on lower operating expenses, particularly fuel costs. The strengthening of sterling and the Australian dollar by 14 per cent and 20 per cent since January should also bode well for the group on a sequential basis,’ DBS Group Research said.

It also singled out Comfort’s ‘diversified geographical presence’ and its ability to deliver stable growth in the economic downturn as plus points.

Meanwhile, CIMB Research maintained a ‘neutral’ on Comfort with a new target price of $1.64 and Kim Eng called a ‘hold’ on Comfort with a target price of $1.59.

‘The stock has done better than expected in recent months on a rising stock market but at the current share price ($1.57), Comfort is trading at 15x FY09 and 14x FY10 forecast earnings with dividend yield of a mere 3.4 per cent,’ Kim Eng said in a note yesterday.

Net profit for Q2 2009 increased by 0.9 per cent to $57.3 million.

However, there was an exceptional gain of $26.5 million in Q2 2008.

Excluding that exceptional gain, the year-on-year increase in net profit for the second quarter of this year would have been 89 per cent.

Revenue fell by 4 per cent to $758.3 million compared to the same period last year due mainly to the negative translation effect of the weaker pound and Australian dollar.

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