Golden Agri’s target cut to 35 cents by DBS in unrated report

SINGAPORE (May 16): DBS Vickers Securities is lowering the target price of Golden Agri-Resources to 35 cents from 38 cents previously after cutting its FY16 and 17 forecast earnings by 5% and 25% respectively.

In a Monday report, analyst Ben Santoso says the strong Palm & Lauric downstream margins in 1Q were higher than usual and may not be sustainable in subsequent quarters.

“Having imputed a steeper drop in the group’s First Fruit Bunch (FFB) yields, we now expect Golden Agri to book 11% and 20% lower EBITDA in FY16F and FY17F, respectively, than our previous forecasts,” says Santoso.

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