Company Name: WILMAR INTERNATIONAL LIMITED
| Research House: JP Morgan Chase | Price Call: HOLD | Target Price: 2.80 |
J.P. Morgan cut its target price for palm oil firm Wilmar International to $2.80 from $4.30 and kept its ‘neutral’ rating, citing tough outlook due to high soybean
costs.
By 11:29 a,m,, Wilmar shares were 1.2% lower at $3.24, and have fallen about 35% so far this year, versus the Straits Times Index's 14.4% rise.
“We think Wilmar’s share price may trade lower into the upcoming second quarter results," J.P. Morgan said in a report, adding that the tough operating environment has not been fully factored into consensus earnings estimates.
Soybean price has increased over 40% so far this year, and is expected to remain high, which will continue to pressure Wilmar's crush margins, the brokerage said.
It reduced earnings estimates for 2012 by 17% on lower margin assumptions.
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