Bumitama Agri kept at 'buy' with $1.26 target price by DBS

Stock Name: Bumitama Agri
Company Name: BUMITAMA AGRI LTD.

Research House: DBS Vickers

Price Call: BUY

Target Price: 1.26

SINGAPORE (June 12): DBS Group Research has kept its 'buy' call on upstream palm oil play Bumitama Agri with a target price of $1.26.

"We peg BAL's TP at $1.26/share, based on DCF valuation. This implies FY16F PE of 14.3x," says analyst Ben Santoso in a report out today.

Santoso says aggressive expansion in FY05-FY13 has kept the age profile of trees at Bumitama younger compared to peers at 5.5 years.

Santoso expects this to deliver 14% CAGR in Fresh Fruit Bunch output over the next three years.