Olam jumps on earnings, higher profit target

Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED

Research House: Credit Suisse

Price Call: BUY

Target Price: 3.85

Shares of Singapore commodity firm Olam International (OLAM.SI) rose as much as 6.4% on Wednesday after it reported quarterly earnings that were stronger than expected and raised its profit target for the medium term, traders said.

At 9:36 a.m., shares of Olam were 5.6% higher at $2.46 with over 8 million shares changing hands.

Olam said on Monday its fourth-quarter net profit rose 38% from a year ago to $127.4 million, helped by higher margins from its recent investments in plantations and processing.

Credit Suisse has raised its target price for Olam to $3.85 from $3.70 and kept its outperform rating, as it expects Olam to deliver stronger volume growth and better margins.

Olam’s management targets to deliver US$1 billion ($1.2 billion) in net profit in fiscal 2016, up from its previous target of US$454 million in 2015, Credit Suisse said in a report.