Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
DBS Vickers Securities in a Sept 29 research report says: "FY2012F-2013F earnings raised by 8-13% on commodity price adjustments and changes in FX rates. We expect Olam to deliver 44% y-o-y growth in FY2012F core net profit, followed by flat growth in FY2013F on lower FX gains.
"Despite higher earnings estimates, we have lowered our TP by 16% to $2.15 due to use of higher equity risk premium (ERP) in our DCF calculations. Implied ERP movements since 2000 have empirically shown that risk aversion heightens ahead of weak GDP growth.
"Based on our in-house GDP growth forecast, we now impute ERP of 10.5% from 6.5%.In the absence of any acquisitions, we do not foresee any potential catalysts until 1QCY12, when its Gabon urea project is expected to secure financial closing. HOLD"
Company Name: OLAM INTERNATIONAL LIMITED
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 2.15 |
DBS Vickers Securities in a Sept 29 research report says: "FY2012F-2013F earnings raised by 8-13% on commodity price adjustments and changes in FX rates. We expect Olam to deliver 44% y-o-y growth in FY2012F core net profit, followed by flat growth in FY2013F on lower FX gains.
"Despite higher earnings estimates, we have lowered our TP by 16% to $2.15 due to use of higher equity risk premium (ERP) in our DCF calculations. Implied ERP movements since 2000 have empirically shown that risk aversion heightens ahead of weak GDP growth.
"Based on our in-house GDP growth forecast, we now impute ERP of 10.5% from 6.5%.In the absence of any acquisitions, we do not foresee any potential catalysts until 1QCY12, when its Gabon urea project is expected to secure financial closing. HOLD"
No comments:
Post a Comment