KUALA LUMPUR (Dec 2): Affin Investment Bank Research is maintaining its Reduce recommendation on Axiata and lowered the target price to RM4.39.
It said on Friday it had revised lower its sum-of-parts derived target price to RM4.39 because of the earnings downgrade (higher capex, lowered Celcom sub assumptions), and maintain our Reduce rating on the stock.
“In our view, stock lacks any re-rating catalyst and is pricey at 16 times FY12 EPS, considering that dividend yields are merely 2%.
“Moreover, our forecast implies a core net profit decline of 3.3% in FY11, but rising to +5.2% on-year in FY12, although not compelling enough to warrant this as a growth stock. At our target price, stock trades at a more compelling 14 times FY12 EPS,” Affin Research said.
It said on Friday it had revised lower its sum-of-parts derived target price to RM4.39 because of the earnings downgrade (higher capex, lowered Celcom sub assumptions), and maintain our Reduce rating on the stock.
“In our view, stock lacks any re-rating catalyst and is pricey at 16 times FY12 EPS, considering that dividend yields are merely 2%.
“Moreover, our forecast implies a core net profit decline of 3.3% in FY11, but rising to +5.2% on-year in FY12, although not compelling enough to warrant this as a growth stock. At our target price, stock trades at a more compelling 14 times FY12 EPS,” Affin Research said.
