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KUALA LUMPUR: RHB Research has upgraded IJM Plantations to Neutral as it believes the downside has reduced.
It said on Thursday after reviewing the FY14 fresh fruit bunches (FFB) output, it lowered its FFB projections as Indonesian production was affected by the dry weather.
“However, we lift our crude palm oil (CPO) price forecasts after removing the export tax discount we previously imputed, as the company continues to sell all its CPO locally, with sales discounts to local refiners reduced,” it said.
RHB Research reduced its FY14 earnings forecast by 6.6% but lifted its FY15-16 estimates by 5.7% to 6.2%.
“Following our forecast revision, we raise our target price to RM3.16 (from RM3.05), based on an unchanged target price-to-earnings of 16 times CY14. As valuations are now less prohibitive and downside risks have reduced, we upgrade our recommendation to Neutral from Sell,” it said.
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