Credit Suisse upgrades Indofood Agri

Stock Name: IndoAgri
Company Name: INDOFOOD AGRI RESOURCES LTD.

Research House: Credit Suisse

Price Call: BUY

Target Price: 1.90

Credit Suisse upgraded palm oil firm Indofood Agri Resources (IFAR) (IFAR.SI) to outperform from neutral and raised its price target to $1.90 from $1.67.

Indofood Agri Resources shares were up 0.7% at $1.53, having risen 21% so far this year.

Credit Suisse increased its earnings per share estimates for IFAR’s 2012-2014 fiscal years by 5-9% respectively. It said every 100 ringgit ($41.1) increase in crude palm oil (CPO) price will boost IFAR’s earnings by 4.6%.   

“IFAR is now the cheapest plantation company under our coverage. We believe IFAR’s high earnings sensitivity to CPO price, its higher liquidity, and its relatively undemanding valuation will bolster its trading multiple to re-rate.”