Maybank Kim Eng and OCBC Investment Research raised their target prices on Singapore's DBS Group Holdings after the bank beat forecasts with a 10% increase in its second-quarter net profit.
DBS shares were up 1.2% at $14.93 on Monday. The stock has gained around 30% so far this year versus the 16% gain in the broader Straits Times Index.
OCBC increased its target on DBS stock to $15.94 from $15.40 and maintained its buy rating, after raising its 2012 fiscal year earnings estimate to $3.25 billion from $3.14 billion.
While market conditions are expected to remain challenging, DBS's management strategy such as to increase cross-selling, raise productivity, reduce its cost-to-income ratio and grow its key businesses may help ensure a healthy second half, OCBC said.
Maybank increased its target price to $13.10 from $12.10 to take into account a higher price-to-book value of 1.05 times versus 0.97 times previously and a bigger 2012 return on equity of 11.1% from 10.8%.
The broker noted that DBS's loan momentum picked up in the second quarter and liquidity remains ample, but the bank still faces net interest margin pressure and external headwinds.
Maybank maintained its 'sell' rating on DBS stock.
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