Nomura cuts ComfortDelGro to $1.72 vs $1.98

Stock Name: ComfortDelGro
Company Name: COMFORTDELGRO CORPORATION LTD

Research House: Nomura

Price Call: BUY

Target Price: 1.72

Nomura has cut its target price for Singapore’s taxi and bus operator ComfortDelGro (CMDG.SI) to $1.72 from $1.98 and kept its buy rating.

Nomura has cut its net profit estimates for ComfortDelGro in 2011 to $229 million from $256 million, to reflect weaker bus operations in Singapore and start-up costs from its new railway network, the Downtown Line.

The brokerage said it expects the Downtown Line to start contributing significantly to the company’s earnings by 2019, with daily ridership expected to surpass half a million.

“We expect the group to continue to expand its overseas business, both organically and through strategic acquisitions or joint ventures in its bus and taxi businesses,” Nomura said in a report.

At 12:22 p.m., shares of ComfortDelGro were 0.74% lower at S$1.34, and have fallen about 13.6% since the start of the year.