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Broker's Take: DBS downgrades Super Group to "hold", prefers Oldtown Bhd
DBS Group Research on Tuesday downgraded its rating on Super Group from "buy" to "hold", revising its 12-month target price to S$1.46 from an earlier S$1.38.
This follows a tweaking of gross margin assumptions on the back of coffee prices staying low and improved global supply. FY2015 and FY2016 forecasted gross margin assumptions have now been raised from 35.5 per cent to 36 per cent each, resulting in 11 per cent and 9 per cent increases to FY2015 and FY2015 estimated earnings respectively.
Analysts Alfie Yeo and Andy Sim now advocate switching to Oldtown Bhd as their preferred coffee play.