Tuesday, 24 April 2012

Top Glove advances on analysts’ upgrades

KUALA LUMPUR (April 24) : Top Glove Corp Bhd advanced as much as 2.3% after analysts raised their earnings forecast and target price for the world’s largest rubber glove manufacturer in terms of capacity.

The stock rose 10 sen to RM4.53 before settling lower at RM4.50 at lunch break. In a note, Maybank Investment Bank Bhd analyst Lee Yen Ling said the research house has raised its earnings per share (EPS) forecast for Top Glove by 8% to 12% for financial years (FY) ending August 31, 2012 to 2014 after taking into account lower prices of natural rubber.

“With majority of its sales in the latex segment (74% of total sales), a surplus-led lower latex cost will help Top Glove to at least sustain its margins. We lower our latex cost assumption by 7%, resulting in an 8% to 12% upward revision to our FY12-14 EPS forecasts,” Lee said.

Maybank which revised upwards its fair value for Top Glove shares by 29% to RM5.40 from RM4.20, also upgraded the stock to a “buy” from “sell”.

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