Company Name: WILMAR INTERNATIONAL LIMITED
| Research House: JP Morgan Chase | Price Call: HOLD | Target Price: 4.30 |
JP Morgan Securities downgraded Wilmar International to neutral from overweight as the recovery in oilseeds crush margin in April appears short-lived.
Shares of the world’s largest listed palm oil firm were flat at $3.76, compared with the Straits Times Index’s 0.4% gain. Wilmar has plunged nearly 25% since the start of the year.
The brokerage also cut its target price on the stock to $4.30 from $5.20.
“The strong recovery in China’s soybean crush margin was short-lived, with downtrend continuing through May. We now see little likelihood of the oilseeds and grains segment reversing its losses in the first quarter,” JP Morgan said in a report.
Wilmar may see flat to weaker earnings in the second quarter compared with previous quarter, and consensus earnings estimates may have further downside of about 20 to 30% if crush margins remain under pressure, the broker said.
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