Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
Research House: Deutsche Bank
It adds, Olam, due to its geographic and product diversification, has limited exposure to countries facing geopolitical and national crises. “Uncertainties in Japan and the Middle East are unlikely to materially affect Olam's bottom line given its insignificant presence in these countries. Meanwhile, Olam's cocoa bean supply should remain largely unaffected by the unrest in Ivory Coast.”
Company Name: OLAM INTERNATIONAL LIMITED
Research House: Deutsche Bank
Olam (O32.SG) surges 4.5% to $2.77, leading gainers among blue chips and regaining levels last seen before the Japan earthquake-inspired market selloff.
Deutsche Bank says the stock is offering strong earnings growth of 24% per year, while its current valuation of 14X forward P/E “looks attractive as it translates to a PEG of 0.6X compared with the historical 0.7X-0.9X range”. “The drop in commodity prices should help to ease pressure on working capital funding while volumes and margins are expected to remain resilient.”
Deutsche Bank says the stock is offering strong earnings growth of 24% per year, while its current valuation of 14X forward P/E “looks attractive as it translates to a PEG of 0.6X compared with the historical 0.7X-0.9X range”. “The drop in commodity prices should help to ease pressure on working capital funding while volumes and margins are expected to remain resilient.”
It adds, Olam, due to its geographic and product diversification, has limited exposure to countries facing geopolitical and national crises. “Uncertainties in Japan and the Middle East are unlikely to materially affect Olam's bottom line given its insignificant presence in these countries. Meanwhile, Olam's cocoa bean supply should remain largely unaffected by the unrest in Ivory Coast.”
The house reiterates its Buy call but revises its target to $3.20 from $3.60 due to an adjustment in cost of equity and market risk.
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