SMRT cut to "reduce", target lowered to $1.64 by CIMB

Stock Name: SMRT
Company Name: SMRT CORPORATION LTD

Research House: CIMB

Price Call: SELL

Target Price: 1.64

SINGAPORE (May 4): CIMB has downgraded SMRT Corp to "reduce" from "hold" and cut its price target from $1.80 to $1.64, saying the public transport operator's rail business will face increasing challenges.

It also lowered its earnings per share estimates for FY2016 to FY2018 by 10.6% to 12.2% to factor in rising repair and maintenance costs, and higher depreciation charges associated with SMRT's expanded train fleet.

The company's rail business reported its first quarterly loss in its fiscal fourth quarter ended March 31, hurt by a bigger repair and maintenance bill.